Five Home Renovations to Increase Property Value
Some home rehabbers might be eager to make their project look as beautiful as possible, but not all upgrades get equal attention (or bring equal returns). When it comes to home renovations, the money you spend is not always recouped, and some improvements can have diminishing returns. It’s important to know how to differentiate between “nice to have” upgrades and those which get you the highest ROI. Here are our top 5 favorite ideas for updates that get the most bang for the buck.
1. Renovate the Kitchen
Most investors will tell you the main features that “sell” the home are the kitchen and the master bedroom. The kitchen is the heart and centerpiece of the home and typically the most important consideration for buyers when choosing a house. You want to make sure this part stands out and provides a “wow factor” for any potential buyer. Open-concept kitchens and living spaces are the most desirable in the current market, so opening up a kitchen wall can create a much more voluminous and airy feel and make the space look bigger without having to add any square footage.
Although a full kitchen renovation is a considerable expense, Remodeling Magazine estimates that you will likely recoup between 60% and 120% of your costs. But if you don’t have the budget – or the stomach – for a full remodel, fret not! You don’t have to spend a fortune gutting the entire kitchen. Statistics show that even minor kitchen improvements can boost a buyer’s bid by $5,000 (source: inman). The bottom line is – make sure to give the kitchen some love. No matter what route you choose, full reno vs. minor updates, the money and effort you put in will certainly pay off.
2. Add a bathroom
People spend a lot of time in the bathroom, and this plays a very important part in the decision-making process of buying a home. The number and condition of the home’s bathrooms can make or break a sale. If you have a property with more than 3 bedrooms, generally, adding more rooms will not yield you a much higher profit. However, turning a 2/1 into a 2/2 or adding a bathroom to a 3/1 can make a huge difference in the value and appeal of your house. Consider turning a closet, an area under the stairs, or even a small room into a bathroom. You only need 30 square feet to create a full bathroom with a shower stall, so if you can find a little extra space you can spare, the small sacrifice is sure to pay off.
3. Add a deck or patio
Who doesn’t enjoy al fresco dining or lounging outside, soaking up the beautiful California sun? Outdoor living spaces are becoming increasingly more popular, especially given the current environment in which many people are spending more time at home and opting for “staycations'' rather than traveling. Adding a deck is a favorite rehabber “hack” to increase value, desirability, and usable square footage of a home. Building a patio or deck off of a living room or master bedroom with sliding glass door entry can make the existing rooms feel much larger and more open. This is especially true if the property has views and you’re able to build a deck that faces them. Sunset dinners, anyone?
4. Improve curb appeal
As the saying goes: “You only get one chance to make a great first impression.” Nothing can be more true when it comes to buying a home. The first thing buyers will see – in person and online – is the exterior of the house.
Install a nice front door or repaint the existing one. Spruce up the landscaping and consider using drought-tolerant plants for a low-maintenance, environmentally-conscious garden. If there is a deck or front porch, add a little outdoor furniture or decor to create a welcoming vibe. Remember, your buyer will likely be purchasing this house for themselves and their family to live in, and this tends to be an emotional decision. A beautiful exterior can make a home buyer fall in love at first glance.
5. Give it a fresh coat of paint
This goes back to first impressions but touching up or repainting a home can make it look new again. It’s a fairly inexpensive upgrade that sometimes gets overlooked, but statistics show that a fresh coat of paint can boost a home’s sales price by up to 15% (source: realtor.com)!
Consider adding some small, unique improvements that give your house some character and help it stand out. Perhaps install smart home features, replace all lightbulbs with LEDs, spend a little extra on energy-efficient appliances, install an attractive lighting fixture in the dining area, create extra storage by adding a shed to the yard. Sometimes the little things can make a big difference.
There are many ways to add value to a property that don’t have to include a full remodel. Not all rehabs are created equal and you don’t need to overspend to get the most out of your investment. Just make sure to take the time to plan, and consider your options carefully. When in doubt, you should always consult with a trusted agent, mentor, or fellow investor.
What improvement do you feel has given you the most return on your investment?