Home Renovation: The Best Return on Your Investment

Home Renovation: The Best Return on Your Investment

  • The Alliance Group
  • 12/28/20
According to a recent survey, 85 percent of us are spending more time at home as a result of the Covid-19 pandemic. The same study shows that:

  • 63 percent of those surveyed said that they are noticing more areas in need of improvement around their homes.

  • The average household spent $13,138 on home services and renovations in 2020, up from the $9,081 that homeowners spent in 2019.

  • Homeowners completed, on average, 11 home service tasks or projects in 2020, with the most popular being bathroom remodels, interior painting, and new floor installation.

  • The top reason for completing a home improvement was to “make the home better suited for lifestyle needs.”

While many homeowners are tackling small projects (such as updating tile and repainting living spaces) others are choosing to use the pandemic down-time to complete larger projects (such as the addition of a home office and improvement of outdoor spaces.) In this article, we will take a look at which of these home renovation projects add the most value to your home.

Kitchen Remodel

Today, many homeowners are finding that they are cooking and enjoying more meals at home and that a kitchen remodel is therefore needed. A kitchen remodel is at the top of our list of renovations that have the highest return on investment (ROI) rate. A minor kitchen renovation, which includes re-facing cabinets and drawers, updating countertops, lighting, and flooring, and adding new appliances and fixtures, can average a 78 percent ROI. A major kitchen remodel in which the floor plan is changed/enlarged to include a dining area, multiple islands, and additional or updated windows and doors can have a slightly lower return.

Bathroom Remodel

Many homeowners are seeking to create a spa-like retreat in their existing bathrooms. A mid-range bath remodel can recoup as much as 64 percent of the cost invested. Simple fixes such as updating lighting and swapping out fixtures and countertops can make a big difference. Energy-efficient steps, such as replacing an old toilet with a low-flow model, will help ROI as well. Also consider adding an additional bathroom or half-bath to increase your home’s functionality as well as value.

“Found” Space

With so many of us working, studying, and playing in our homes, we are looking for more living space. Many homeowners are using “found” space in their basement or attic to create living areas. Basements can be reinvented to become entertainment areas, and unused dining rooms can be turned into the perfect home office. The ROI depends on specific plans, but the extra space can be enjoyed by you and your family today and converted into a newly imagined space in years to come.

Outdoor Living Space

The great outdoors has become the perfect place to entertain family and friends during the pandemic. Adding a deck, patio, and/or firepit is a great way to update your outdoor living space and add value to your home. Depending on the design and material you use, ROI can be as high as 72 percent. In addition to creating a new living space, consider adding outdoor lighting, a new front door, or updated windows to make your home more attractive and to add to its curb appeal.

If you are contemplating the cost and benefit of updating your home or whether finding a new home would be more beneficial, we would be happy to discuss the options and provide our professional opinion. Don’t hesitate to contact us for assistance!

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The Alliance Group provides a seasoned and experienced team of real estate professionals to guide our clients through the sales process while presenting insightful options to achieve their desired goals.

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