Do you need to renovate your house before selling?

Which home renovations are worth spending depends on your goal for the project and your budget.

If you plan to maximize the value of your home to resell it later, consider investing in low-cost projects with a high return on your investment. On the other hand, if your goal is to create a space customized for your unique lifestyle, you can consider projects dedicated to increasing the comfort and use of your living space.

What home improvements are worth the investment?

The renovations worth investing in are those needed to prepare your home for a potential buyer. Depending on the current condition of your home, this may mean completing a major renovation or refreshing the home’s overall aesthetic to a more timeless look.

“Buyers want to be sure that when they buy a home, they won’t have extra costs,” says Jill Franks, lead interior designer and project manager for Freemodel, a California-based home renovation company dedicated to maximizing property values.

There are several home improvements to consider that will increase the value of your house, but finding one with a high return on investment will help you determine the best use of your budget.

Build an addition

Add a new bathroom

Average price: 80,000 dollars

Average value: 50,000 dollars

Return on Investment: 63%

The total cost of the project will depend on whether you want to add a full bath that includes a tub or shower or a half bath that doesn’t. Depending on how many bathrooms your home currently has and the bedroom-to-bathroom ratio, adding an extra bathroom can make your home more livable if you plan to stay for a while, or increase property value—especially if your home currently there is only one bathroom.

The cost also depends on whether you are adding additional square footage to your home by adding or freeing up space in your current floor plan. If you can find a way within the existing floor plan and the extra bathroom adds significant value to the price of your property, then it may be worth the investment, says Franks.

Add a new bedroom

Average price: $172,500

Average value: 100,000 dollars

Return on Investment: 56%

Like adding a bathroom, adding a bedroom is something that should only be considered if it increases your comfort or the value of the property by at least twice the cost of the investment, according to Franks. This is due to the time required to obtain a building permit for the extension and complete the project.

It is also one of the most expensive home renovations a homeowner can undertake. But if homeowners can find extra space within their existing floor plan to add an extra room, they may be able to reduce the cost and schedule of the project, which can make it a worthwhile investment.

Renovate your kitchen

Average price: 80,000 dollars

Average value: 60,000 dollars

Return on Investment: 75%

A major kitchen remodel often involves tearing down existing kitchen cabinets and countertops and replacing them with an updated floor plan. This is more expensive than a minor remodel, which can be as simple as adding a new coat of paint and updating the hardware.

If you’re planning to put your home on the market, a little update may be just what your kitchen needs to freshen up the space so a potential buyer can picture themselves in the home. But one thing to keep in mind when selling is to avoid getting emotionally attached to your personal aesthetic and stick to timeless colors and finishes so potential buyers can imagine living in the home for a long time time.

Renovate your bathroom

Average price: 35,000 dollars

Average value: 25,000 dollars

Return on Investment: 71%

If your bathroom is limited in space, you can increase its functionality by updating its current layout. This maximizes your existing square footage and is more cost effective than building an additional bathroom from scratch. Refreshing your current space can also add a unique touch to your home that makes it stand out from other listings on the market, says Franks.

Renovate your basement

Average price: $57,500

Average value: $49,250

Return on Investment: 86%

If you have an unfinished basement, you can greatly increase the value of your home by finishing the space. It increases the usable spaces of your home and can provide space to add an extra room to your home.

This is also an opportunity to add an additional living unit, such as an in-law suite or rental property. This project became increasingly popular during the pandemic as more people needed a separate space for family members to move into or were looking for an additional income stream to supplement their earnings, Franks says.

Renovate your home’s exterior

New roof

Average price: $12,000

Average value: $12,000

Return on Investment: 100%

New garage door

Average price: 2000 dollars

Average value: 2000 dollars

Return on Investment: 100%

New vinyl siding

Average price: $18,300

Average value: $15,000

Return on Investment: 82%

New fiber cement siding

Average price: $18,600

Average value: $16,000

Return on Investment: 86%

Replacing your roof and siding often provides a high return on your investment, as they are necessary repairs and can last for decades. You can also increase the overall energy efficiency of your home, which lowers your utility bills. Disengaging your garage door not only adds curb appeal, but also gives you the chance to include smart technology that allows you to remotely close your garage door if you forget.

“Buyers today want to walk into a home and feel like even if it’s not their dream home from a cosmetic aesthetic standpoint, they’re walking into a home that they can actually live in for a while before they have to to spend money,” says Franks.

Replace doors and windows

New steel front door

Average price: 3150 dollars

Average value: 2000 dollars

Return on Investment: 63%

New fiberglass front door

Average price: 3500 dollars

Average value: 2100 dollars

Return on Investment: 60%

New vinyl windows

Average price: 30,000 dollars

Average value: 20,000 dollars

Return on Investment: 67%

New wooden windows

Average price: 48,000 dollars

Average value: 30,000 dollars

Return on Investment: 63%

Replacing your front door can improve the overall look of your home, but it’s not such a wise investment because buyers tend to only focus on whether the front door is functional, says Franks.

Instead, if you have enough in your budget, consider replacing the windows. Energy efficient windows help insulate your home and prevent extreme weather conditions from entering. On average, replacing old windows reduces your energy bill by 12%—which is good news for potential buyers and will increase the overall value of your property.

Major vs minor repairs

Overhaul: It means a major or dramatic change in the structure of your home. Major repairs and remodeling usually cost more than minor updates because of the scope of the project and the materials used.

Small repair: It focuses on cosmetic changes to the existing structure of your home. Small renovations can be more cost-effective than major renovations because they usually focus on changing small details to freshen up the space, such as replacing hardware or flooring.

The taking

Home improvement projects such as roof replacement and siding are a surefire way to recoup almost all of your investment. But other projects—like building a bathroom or bedroom addition—may cost you more to complete than a buyer is willing to pay.

When considering where in your home you want to invest your money, you should first consider the purpose of your project. “The idea of ​​renovation is, if you stay in this home, you make it your dream home,” says Frank. “But if you’re selling it, it’s to maximize the dollars in your pocket.”

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