Oftentimes a small investment in home improvement can yield a significant return. You can expect to get almost 100% return on investment (ROI) on some home improvements; especially if it is planned carefully. Whether you are preparing to sell your home or simply wish to increase the value, a minor home improvement can make you money.
There is a difference between remodeling and renovating. A remodel usually involves a significant structural change and/or alteration to the space. It can also involve the replacement of the major components in the space. e.g. a sink or bathtub in a bathroom. Compared to when you renovate a space, you are essentially restoring elements of the existing room. e.g. refacing cabinets instead of replacing them. We are going to focus solely on renovation in this article, as we generally see the highest ROI from renovations.
Minor Bathroom Renovation: Average ROI = 100%
Did you know men spend an average of 855 days per year in the bathroom? While women spend an average of 770 days in the bathroom, according to Bathroomdeal.com. Combined, that’s a total of 4 years and 5 months spent in the bathroom! With all this time spent in this space, it’s not surprising a renovated bathroom can be highly desirable to a prospective buyer. Generally, a minor bathroom renovation can cost roughly $10,000, while a major bathroom remodel can be in the $50,000 range. However, a major bathroom remodel does not typically yield the same ROI. So it’s best to stick with a minor renovation if you want the highest ROI.
Budget-friendly quick-fix: Refresh the space by reglazing a bathtub or adding new tile.
Minor Kitchen Renovation: Average ROI = 100%
Many people believe the kitchen is the heart of the home. The kitchen is a popular spot when you are entertaining, and it seems like guests will almost always end up there. The space is dynamic and makes people feel comfortable because they can easily move from one area to another while fetching food and drinks. It is important to have an updated kitchen because this is one room your guests will most likely see. A kitchen renovation can cost $10K – $15K depending on the quality of finishes. Updating countertops with granite may be less expensive than marble, so you should budget the project accordingly.
Budget-friendly quick-fix: Save money by refacing the cabinets and adding new hardware.
Curb Appeal: Average Combined ROI = 100%
When looking at a home, people really do judge a book by its cover. A home with less than desirable curb can be a deal breaker for many buyers. It can also be off-putting to guests and neighbors alike. There are plenty of small renovations that make a huge difference. The biggest bang for your buck is a fresh coat of paint, this can yield an average ROI of 120% — making you more money than you invested!
Other considerations are replacing the front door (average ROI 100%), garage door (average ROI 90%), windows (average ROI 80%), or roof (average ROI 80%). We also suggest sprucing up the landscaping and power washing the driveway and exterior. The budget for this renovation is really dependent upon how many renovations you choose to improve your curb appeal. Keep in mind, the average combined ROI for enhancing the curb appeal is 100% so you can’t go wrong with any of them.
Budget-friendly quick-fix: Make it a DIY project and power wash, paint, and landscape the exterior yourself.
Outdoor Space: ROI Range = 70% to 80%
Outdoor space is a treasured place for many homeowners. Generally homeowners add a deck, patio, or porch to maximize the outdoor space. Oftentimes people view this additional space as part of the actual home. Therefore function, flow, and space optimization are important things to consider when planning a renovation. You will also want to factor in the year-round weather conditions. The outdoor space is meant to be used, so you will want to decide which option is best for your home.
Perhaps a covered porch that protects from the unbearable afternoon sunlight is a better choice than an uncovered deck. Additionally, you will want to select materials that can sustain the outside elements such as rain, wind, sunlight, bugs, and snow. You may want a composite in an area that is exposed to damaging weather. Lastly, you need to know what you will be doing at this space beforehand. If you plan to eat in the space you may want to enclose the area to keep annoying bugs and pests away. No matter which option you choose, a carefully thought-out outdoor renovation can make you money. Plan on spending between $2000 to $7000 for this renovation.
Budget-friendly quick-fix: Consider using a deck kit, which can be an affordable option.
How To Fund The Home Improvements
Now that you have the money making renovations down, it’s time to discuss how to fund these projects. A few options are a HELOC (home equity line of credit) refinancing your mortgage, or taking out a home improvement loan. Each loan is different and you should weigh out the pros and cons of each before making a decision. You can gain more insight about each loan by reading a few of my blogs. Click the links to learn more about home improvement loans, HELOCs, and refinancing your mortgage. No matter which loan you choose, I highly encourage you to shop and compare loans first, so you can get the best rates available.