A home renovation is a big decision, and there are several factors to consider before you commit. One of the biggest questions homeowners have about renovations is how much these changes will affect the overall value of their homes. You might not be thinking about moving any time soon, but a high return on investment (ROI) can be the push you need to commit to a remodel. Take a closer look at renovations and home improvements with a high ROI to see if they help you make your decision.
The ROI for remodels is subject to change with the housing market. Even so, there are various home improvements that seem to increase home value across the board. Based on current research, these home improvement projects offer the best returns.
Kitchens are the heart of many homes. Families share dinners, celebrate holidays and host parties with the help of the kitchen, but they’re often outdated in older homes. A major kitchen remodeling project can be a big undertaking, and that’s why these spaces are so often left untouched. The good news is that an updated kitchen is a huge selling point for a home.
According to the 2023 Cost vs. Value Report, a major kitchen remodel in the Philadelphia, Pennsylvania, region can reap an average ROI of about 41.3% for midrange projects and 30.4% for upscale projects. With that said, your exact return will depend on a few factors, such as your neighborhood, project scope and the level of craftsmanship.
Costs can add up with replacing cabinetry, adding new floors and introducing a backsplash, but when you sell your home, you make most of it back. Plus, you get to enjoy a kitchen with a fresher look while you live there.
The best way to make the most of your kitchen remodel and get the highest ROI is to be thoughtful in your design selections. Choosing overly trendy finishes, designs and colors may lead to an outdated kitchen in another few years. Working with an interior designer can help you choose the elements of your new kitchen that suit your style while remaining classic and appealing to buyers.
Home additions can be lucrative remodeling projects, though the ROI typically depends on what space you choose to add. For instance, adding a new bathroom has an average return of 63%, while adding a bedroom has about a 56% ROI. It’s important to understand that the return you get from a home addition is highly dependent on what your home was like before.
For example, the bedroom-to-bathroom ratio is a considerable factor in home design because it makes sure the space is comfortable for everyone living there. Older homes may have a more lopsided ratio, like four bedrooms to one bathroom, that may not be the most livable. Adding a full bathroom to a home like this can have a huge impact.
Adding a bedroom to your home may be beneficial if it only has one or two bedrooms currently, especially if you live in a family neighborhood where people with kids are looking to buy. You can also think about bedroom placement. Does your home have three bedrooms on the second floor? Adding another bedroom on the first floor can make the home more appealing for older homeowners who may eventually want to avoid the stairs.
Of course, you have far more options for your home addition than a bathroom or bedroom. You might choose to add an office, laundry room or mudroom to make your home work more for your lifestyle. You can also add an in-laws suite or guest quarters if you are interested in having loved ones move in or friends come for an extended stay. Introducing these spaces can add substantial value to your property, especially considering that multigenerational living is on the rise.
Bathroom remodels can offer an impressive ROI. According to real estate experts, a major bathroom remodel can offer a 93.2% return. While kitchens are often one of the biggest rooms to attract buyers, bathrooms are also big selling points.
Outdated bathrooms can feel far from relaxing and might not be conducive to your daily activities. You may want to remodel your bathroom on a larger scale to correct things like awkward plumbing or make a wet room with a shower and a tub. These renovations can be massively appealing to buyers, and they help create a spa-like space to enjoy when you live in the home.
Unfinished basements and attics have untapped potential. These spaces often have large footprints and become a wide range of useful spaces, from entertainment rooms to bedrooms. According to the 2022 Remodeling Impact Report, finishing a basement and turning it into a living area offers an impressive 86% return. Homebuyers might find these spaces especially appealing if they have kids and want a play area or other family space.
A finished attic is a popular way to add a bedroom to your home without a home addition. Real estate experts claim this remodel offers an average return of 93.5%. The great part about transforming your attic into a bedroom is the flexibility it offers. These remodels can easily become home offices, art studios, craft rooms or anything else that suits your lifestyle.
When you’re thinking about a remodel, considering the ROI is helpful for making a smart financial decision. At the same time, renovations are more than a monetary investment — they’re an investment in your happiness and comfort. High financial returns may be the factor to convince you, but you also want to think about what will make your family happy.
One of the biggest reasons for a remodel is loving your home but outgrowing the space. If you have kids, you might find there’s not enough room for them to spend time with friends. If you’re new parents, you might want an extra bedroom. Sometimes, you love your area and want to stay put, but a few of the most important spaces are outdated. Your kitchen might have an odd layout or your bathroom has seen better days.
Ultimately, the return on investment shouldn’t be the only factor that pushes you to start your renovation. If you love your home, you can adapt it to fit your life.
At COCOON, we help you reimagine your home. Our team of architectural designers, interior designers and experienced builders helps homeowners transform their spaces to fit their lifestyles. We offer a unique 3-stage process that makes your renovation feel manageable. Our designers provide three design possibilities according to your budget to help you explore your options and find the one that speaks to you.
COCOON does not guarantee the ROIs listed. This article is based on research pulled from other sources on the internet. Please do your own local research.