The Best Return on Investment Home Remodeling Projects
Home remodeling is America’s new favorite pastime. There are more DIY aficionados out there than ever before, thanks to easy access to information on the internet. According to the statistics, about 55% of homeowners have a remodel project planned in the next six months. Everything home is on-trend, including ‘flipping houses.’
While remodeling is often done simply for the pleasure of personalizing a space, you can get a nice financial return out of your remodel if you play your cards right. Some remodeling projects are destined to deliver the best return on your investment home remodeling. Of course, cosmetics are always important, but there are other places you should be putting your money as well. The best return on investment home remodeling projects may not be the obvious visually appealing upgrades that you think adds value.
Top Best Return on Investment Home Remodeling Projects
One of the easiest ways to add value to any house is to replace the roof. Estimates of how much return you can actually see on a new roof range from 20% to 60%. This can be a tremendous boost to the house’s value, and of course, if you are living in the house, you also will not have to worry about any roofing problems for up to 50 years.
You may be thinking, “whoa, wait a minute, roofs are costly.” The fact is if you connect with the right residential roof replacement company, they may have options that you are not aware of that can save you tons of money and still give you one of the best return on investment home remodeling projects.
The right roofing company will offer a wide variety of solutions to get that new roof on your house and stay within your budget. For example, reroofing is a great option if you want a good new roof without spending too much money.
Before you write off the cost as prohibitive, contact expert roofers that offer fair terms and a range of options. When it comes time to sell the house, you will be glad you invested in a new roof.
Best Return On Investment Home Remodeling Projects According to the Experts
If you ask real estate agents where you should put your remodeling dollars, they will tell you that “kitchens and bathrooms” sell homes. Does this mean that you will have to do a full rip-out and start from scratch? It could, but it does not have to.
Sometimes upgrading the plumbing, adding new flooring, and a quick coat of paint can do wonders in a bathroom. Upgrading both the kitchen and the bathroom can deliver an ROI of anywhere between 13% for small updates to about 35% for complete overhauls.
Other recommendations from the experts include upgrading for energy efficiency. The best return on investment home remodeling projects can be rooted in providing future owners with instant energy savings. For example, adding a tankless hot water heater if the water heater needs to be replaced anyway, can be a worthy investment.
A tankless water heater is a high-energy-efficient option and can be a very attractive addition to the right buyer. New windows are another nod to energy efficiency that can give you a nice return on your investment. Today “energy efficiency” is a big buzzword in real estate. Well researched consumers know the value of energy-efficient integration in a house. Again, if you are looking for the best return on investment home remodeling and you plan on staying in the house for a while, you get the benefit of saving on your own energy costs.
Make Sure Everything Is Highly Functional
One mistake many property owners make is ignoring the little annoyances like a garage door that requires garage door repairs. You may look at the garage door as a minor inconvenience because you have spent a lot of time in the house and have already sunk in a lot of money. The fact is, all the upgrades, repairs, and rehab that you do will not matter if your garage door is not working properly. Everything must function as it should. Take some of the rehab money and put it into repairs before you
If you are looking for the best return on investment home remodeling and you have to choose between granite countertops and garage door installation, choose the garage door installation. You can find cheaper ways to manage the countertops.
Getting the best ROI on an investment property or your own home starts with ensuring that all the work you do is not done for nothing. It is far better to have a simpler house where everything functions the right way than it is to have a visual stunner where you cannot close the front door right.
Know Your Limits
It can be a really attractive idea to find a great investment property, do all the work on your own, then flip that house for a nice-sized profit. Unfortunately, there are some things that you really have to have a licensed professional handle. If not, you may have to take some of that profit and invest in a criminal attorney.
- Getting the best return on investment home remodeling sometimes means making less profit but getting the project done right. To protect yourself, you always want to follow the local rules for building permits and codes. You also want to make sure that you hire certified professionals to manage the following:
- Electrical work. Sure, it is perfectly fine to change a couple of light switches, but if new wiring has to be run, call on a professional that is licensed.
- HVAC installation. Let a pro handle any HVAC equipment installation. It will protect the warranty on the equipment, and it will be done right.
- Plumbing, drain cleaning, and sewer lines. Light plumbing is okay, but the heavy stuff should be left up to a certified, licensed plumber.
In many cases, DIY is not the best value. Sure, you will have to pay out of pocket for the labor charge, but in the end, the work will be guaranteed, and you can rest easy knowing it was done right. Additionally, many manufacturers of house system equipment highly recommend professional installation. If something goes wrong with the equipment, they may not honor the warranty.
One of the easiest ways to get the best return on investment home remodeling projects is to clean up the visuals. New carpet, new flooring, new paint, and new cabinetry are pleasing to the eye and can add some value to the property. Again, you can do all the cosmetic work you want, but if there are structural malfunctions or other needed repairs, they will have to be addressed or not get the return you want.
Here are some cosmetics that offer a big boost but that do not require a big investment:
- New flooring. Old, outdated flooring will date the entire house. Adding new flooring is a cost-effective way to instantly upgrade without having to go too deep in your pockets. According to the experts, new flooring can bring in a 9% return on the investment.
- New kitchen cabinetry. 58% of buyers surveyed reported that they bought a house because of the way the kitchen looked. New appliances (while not cosmetic) can also deliver a nice return.
- Fresh paint. Investing in both exterior and interior paint will get you about a 6% return on your investment.
If you want the best return on investment home to remodel, do yourself a favor and stay away from the lux home remodel materials. You may think that a granite countertop would bring in a much higher return than, say, a quartz countertop, but it does not. Quartz is about half the granite price, and you get about a 4% return on both.
When you are remodeling an investment property, keep in mind that you do not want to price yourself out of a decent return by choosing luxury materials. Another good example of what not to do is choosing marble flooring over tile flooring. You may feel like the marble is such a luxurious touch that anyone will see the value when, in fact, whether you add marble or tile flooring, your return will be right around 3%.
There are many scenarios where you will be faced with choosing between top-of-line materials and cheap materials. Go with the midrange choice. It is a smarter way to remodel an investment property, even if you will live in it for a while.
When you are focusing on cosmetics, keep in mind that neutral is always best. Over the top is not always best. Neutral colors for paint, neutral colors for flooring, and midrange costs are always safe options.
What Should You Do Outside to Get the Best Return On Investment Home Remodeling?
Curb appeal matters. It matters in every case, whether you have a sprawling lawn outside or a simple courtyard. Landscaping can come with a return of 12%. What should you be doing outside to ensure you get a great return on your investment?
Remodeling outside areas does not have to be overboard. You want the house to look attractive from the road. If the house needs a painting, paint it. If the gutters are not functioning or they look shabby, either repair or replace them.
If a lawn area investing in a landscaping company, it can be well worth the cost. The front door should be in good shape and painted. A freshly painted exterior can deliver a 5% return. Adding a fence can also be a good investment.
Fencing in a backyard can mean a 3% return on your investment. Not every investment will deliver a double-digit return, but all the little returns added up will be significant.
One of the easiest ways to make a small house more attractive is to add outdoor living spaces. Creating patios, decks, and other outdoor areas for a smallish house can add instant value to the property.
What Will Not Get You Any Points
There are several remodel investments that just will not pay off. Designating a home office space and remodeling that space to look like an office is a bad idea. It may be great if you are going to live in the home, but if you want to flip it or get an ROI, this is not the way to go.
Investing in equipment like a backup whole home generator is never going to add value to a house. It is a luxury item that is just not considered an upgrade. Another way to not get any return on your investment is to install a pool. Pools are great, or are they? A lot of people, including real estate professionals, do not think they are that great. They cost money to maintain, often have problems, and it raises the cost of insurance. All this means a pool would be a terrible investment.
Additions are another bad investment. It can cost upwards of $100,000 to add space to a house. If you get back 1/3rd of what you put out, consider yourself lucky. Additions or creating expansive master bedrooms by knocking walls out never pay you back. Unless you plan on staying in the property for a while and really enjoying the space, these are bad investments.
Balance It All Out
The best way to determine the best return on investment in home remodeling projects is to know your market. Please get familiar with the other properties in the area and what they have to offer. Compare recent sales and see what the top sellers had going for them. Is it hardwood flooring? Is it new kitchens? What are buyers in the area looking for when they are buying houses? Understanding your market is one of the best ways to make sure you are making the right remodeling investments.