For most homeowners, the roof over their heads is their most valuable asset. Many Americans have so much invested in their homes that they cannot afford to see the property lose value. This is why they make it a priority to periodically upgrade their homes to keep its value stable and growing.
This is important because on average, people spend thirteen years in their homes before they sell them. This means that in the lifetime of their mortgage, most homeowners will sell their homes at least once. But in order to be able to do that they have to keep the property attractive to potential buyers, explains Blue Mountain Management.
And this is the primary reason why homeowners feel the need to remodel their homes. By installing up-to-date appliances and using the most recent styles and design trends in the home, they increase the probability of selling it above the average price.
Given that improved resale value is the main reason for upgrading a home, owners naturally want to ensure they only undertake the most profitable upgrades. This is why kitchen and bathroom remodels are homeowner’s favorites. These two remodels deliver the most return on investment.
But to what degree does a kitchen or bathroom upgrade improve a home’s value? Should homeowners do a partial or complete remodel of these two spaces? If they do a partial remodel, which components of the kitchen or bathroom should they change?
In this article, we provide answers to these common homeowner’s queries. The post explains how kitchen and bathroom renovation projects can affect the value of your home.
HOW KITCHENS IMPROVE A HOME’S VALUE
As the room at the heart of the home, the kitchen is the room with the most impact on a home’s valuation. The condition of a home’s kitchen makes all the difference to the property’s value. The appearance of this room gives potential buyers an idea of how much homeowners have looked after the home. Kitchens can make or break the deal. This is why kitchen renovations are rated as the upgrade with the most impact on a home’s resale value.
There are two ways homeowners can approach their kitchen renovations or upgrades. They can do a complete overhaul or they can change selected parts of the kitchen. A kitchen remodel project that involves gutting the whole room and redoing it, can cost anywhere from $50,000 to as much as $200,000. And homeowners can expect to recoup 59% of that amount.
It is HS Design Build’s experience that on a scale of good, better, or best quality, $50,000 gets you good, to better. The homeowner is able to replace everything in the kitchen with quality cabinets and finishes. However, this does not include any major changes, such as altering the layout or walls. The high-end of the spectrum can reach as much as 200,000, or higher. This is for large-scale kitchens that select top-of-the-line cabinets and finishes. Layout changes and altering walls will also send a homeowner above the $50,000 mark.
On the other hand, an upscale upgrade will cost around $40,000 and return 52% of the original amount. On average, kitchen upgrades cost $20,000-$50,000. And the project’s ROI can be as high as 80%.
The kitchen upgrades that deliver the most value are:
-Creating an open floor plan by knocking down walls to merge cooking and eating spaces
-Adding extra storage with an island or pantry
-Installing a new backsplash
-Painting the kitchen in modern and trendy colors
-Upgrading countertops to stainless steel or stone
-Installing new, updated cabinetry and under-cabinet lighting
-Buying new appliances
-Installing new flooring
One interesting thing about kitchen upgrades, and indeed most upgrades, is that diminishing returns start to set in the more homeowners spend on a renovation. In fact, the smaller projects often have a bigger impact than large expensive ones. Less expensive alternatives that deliver superior results are:
-Changing plumbing fixtures
-Changing cabinet hardware
-Implementing smart storage ideas
HOW BATHROOMS INCREASE THE HOME’S VALUE
Bathrooms are the most trafficked room in a home and the second most important in terms of the home’s valuation. And due to bathrooms being such functional spaces, they are one of those places where a home’s age tends to show itself.
As a result, buyers often base their decision to buy or not buy a home on the condition of the bathroom. Furthermore, the bathroom greatly impacts the comfort level of the occupants of a home. This is why upgrading bathrooms will have a direct effect on the resale price of the home.
There are two ways to improve a home’s bathrooms; creating an additional bathroom or renovating an old one. Adding a new bathroom makes the home more appealing. But upgrading an existing one often delivers more returns. Though, this depends on how much the project costs.
The addition of a powder bath can cost anywhere from $3,000-$25,000, with a project return of 50%. On the other hand, The average costs for midrange and upscale bathroom renovation are $20,000 to $60,000, depending on the type of bathroom you are remodeling (i.e. master bath, half bath). The projects will return 70.1% and 56.2% respectively. However, it is possible to spend less than these amounts for even higher returns.
The most profitable bathroom upgrades are:
-Upgrading plumbing fixtures
-Installing a rain shower head with glass shower door
-Replacing the toilet
-Upgrading the vanity area
-Installing new lighting and improving natural light
-Adding an exhaust fan to reduce dampness
-Adding a new tile floor
-Making energy-efficient updates