A renovation to a home can yield a great ROI when the right ones are done. While it’s not necessary to make your house look completely brand new on the market, the right renovations can make it much more likely for a buyer to bite at a higher price. There are a plethora of data points that have indicated which ones will consistently bring the best ROI.
Do you need renovations?
There are many factors that come into play when deciding which renovation projects to pursue. It would not make sense financially to find every possible upgrade you can make. This is why it is important to have a realtor to help choose which projects would bring the best ROI for your specific situation. With each home, things like the neighborhood, the exterior, the year it was built, etc. are all to be considered. Keeping consistency with the surrounding houses is needed in order to avoid sticking out like a sore thumb to buyers. So the question remains; Which renovations are the most likely to bring an ROI?
Curb Appeal
While this may not be considered a “renovation”, cleaning up the exterior part of the property is vital to getting potential buyers to check out the house in the first place. Projects can include repainting the exterior walls, landscaping, and a properly paved driveway. Neglecting the outside look of the house can be detrimental to the value and can turn away people at first sight. It is estimated that a good first impression alone can add 5% to the house’s value.
Bathroom
Selling a home with an outdated bathroom can be a turn off for many buyers. It is very tough to add shine to old amenities. According to the National Association of Realtors (NAR), 41% of bathroom renovations through 2019 were done to “upgrade worn out surfaces, finishes, and materials”. It is estimated that 50% of the value is recovered from that type of project. Given the higher costs compared to curb appeal projects, recouping 50% while raising the house value is a good investment. There are some cases in which adding a whole new bathroom can be the right investment to make. It is typically done for houses that are looking to improve overall functionality. While renovating/adding a bathroom is rarely the main reason a buyer closed on the house, the overall ROI makes this a worthy project to embark on.
Kitchen
The same NAR study linked above had listed “Complete Kitchen Renovation” as the number one project that increases the value and appeal to potential buyers. While it’s generally accepted that a well remodeled kitchen can sway buyer opinion, it is important to determine whether the project should be more surface level touch ups or a complete renovation. For example, upgrading to granite countertops may be detrimental for low to mid level priced homes. Having higher cost upgrades relative to lower tier houses can lead to less people inquiring, as those who can afford the higher price point would rather spend that money in a more expensive neighborhood. In comparison to the surrounding houses that don’t have granite countertops, this upgrade would hurt the house’s overall value. It is also important to consider how a bold remodel will be received to various personal tastes. Renovating old school and antique styles can usually yield higher value, compared to a pure overhaul in cosmetics to contemporary kitchen layouts. Again, it really depends on the specific home
East Bay Realty
Having the right realtor can provide a tremendous help in determining possible changes to your home. There are many estimates that need to be considered and our realty team is experienced in using many resources to inform your decisions. We possess construction management experience and can oversee the projects as they are being done for your home. We have a robust network of trade and renovation companies that will bring the best deal for high quality work. If you are looking to figure out possible renovations for your house before selling it on the market, give us a call today!
510-344-6368
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