We all love the feeling of a refreshed, renovated home, and being able to enjoy it instills a sense of pride in its owner. That’s partly why people are spending significant time, energy and money on home renovation projects these days. According to Buildfax, a housing data and analytics company, money spent on remodeling has increased over 40% from this time last year.
It’s no secret that home improvements can be a costly endeavor. Despite this, there are some renovations that are worth their price tags. If you’re looking to increase the value of your home or prepare it for resale, certain renovations may take its appeal to the next level.
Areas Ripe for Renovation
The kitchen is the ultimate gathering space. It’s where the family comes together at the end of the day to prepare a meal, and where guests find themselves chatting over a glass of wine. That’s why many real estate pros say it can be one of the top areas that homeowners will get the most return on investment after renovating.
“We’ve found that many people care more about public spaces than private spaces,” says Katie Lambert, an interior designer with Lambert Home, referring to different living areas in a home.
The kitchen is also one of the areas that is commonly in need of modernization, from outdated appliances to antiquated cabinet styles. According to Remodeling Magazine, the 2021 average for a kitchen remodel is $26,214, adding an average of almost $19,000 to a home’s value, or 72% of the investment. For the best cost returns, the publication recommends leaving the kitchen’s cabinet boxes in place but replacing the fronts. This approach saves on costs but makes a big visual impact. Another area with high ROI includes replacing laminate countertops and adding new, resilient flooring, the magazine notes.
But not every kitchen improvement has to be a major overhaul. Try smaller cosmetic changes, like removing an outdated backsplash, updating cabinet hardware or applying a fresh coat of paint on cabinet doors and drawers, can also be beneficial.
Some prospective homebuyers want a space that is move-in ready, and an outdated bathroom could feel like a big undertaking to a homebuyer. Anything the seller can do to minimize the work buyers need to put into the home can help add to its value. In the bathroom, scratch-free floors, freshly painted walls and recently re-caulked bathtubs and showers are just a few of the budget-friendly updates that experts say give the space a real “wow” factor. But if you’re not planning on reselling for a few years, consider the amount of convenience that a new bathroom will provide for your family. For instance, a 2020 report from Remodeling Magazine showed that a new bathroom that costs $49,598 could boost a home’s value by $26,807, which is 54% of the investment.
Beyond the value increase, the comfort and convenience it provides for your family can extend past what you can add up on a calculator. And while each renovation project has the potential to add varying amounts of value, it’s important to remember that appraisers will look at the big picture when evaluating your home.
“An appraiser places a value on the overall property and typically not on one component,” said Dan Fries, president chief appraiser at Daniel Fries & Associates, Inc. “That being said, we look at certain items on our inspections that play into the final valuation depending on the home.”
For the interiors of homes, appraisers can take into account the condition, quality of materials used and the floor plan. For example, hardwood floors would likely be appraised as higher value than vinyl. Appraisers may also adjust valuations based on open concept versus older-style multi-roomed living spaces. Fries also said homeowners should look into fixing any functional issues with the layout, such as ease of access to bathrooms.
Curb Appeal is Key
First impressions are important. No matter how stunning the interior of your home is, an unattractive landscape risks detracting from the home’s value. Luckily, you don’t need to spend a fortune to boost your home’s curb appeal. A new brick or stone walkway that creates a welcoming path to the front door is a great idea, as is setting up an outdoor seating area with a couple of cafe chairs and a small table. The front door, which serves as a focal point, can get a quick upgrade at a reasonable price with a bold paint color. Even smaller changes, like mixing in dark mulch to flower beds under the front windows, creates a more inviting space.
For the exterior, Fries said, appraisers look at condition, materials and craftsmanship. For example, appraisers will check if everything, such as gutters or the roof, is well-maintained. Even if the condition of exterior components is perfect, the types of materials and how they are installed all play into the home’s value.
A Place to Relax
The backyard is your oasis, and an appealing outdoor living space is highly coveted by potential homebuyers. While the backyard is certainly a component of resale value, it’s also of tremendous personal value for you and your family. Consider applying a fresh coat of stain to an outdoor deck, since it’s more attractive than a weathered one. Or, if you have a small outdoor balcony, add flower boxes or potted plants to usher in some natural beauty. Not only are you creating inviting spaces that may add to the home’s value, but you’re giving your family opportunities to enjoy their home in a new way.
A Place to Work
With people working remotely more than ever, having a functional workspace in your home can influence its value. While dedicated spaces, like a home office, are certainly coveted, consider the flexible nature of remote work that can be done anywhere. Homeowners don’t need a full room to create a workspace. Consider adding a nook in the living room or guest bedroom. The concept of a home office holds plenty of opportunities for value-adding renovation projects.
“After 2020, the home office space is just crying out for renovation,” Lambert said. “This doesn’t necessarily have to mean a formal separate home office, as so many of us just don’t have the space. This year, the home office looks more like an organized work area on the kitchen island or if you’re lucky, on the back porch.”
While it may not be the traditional office you’ve come to expect, having a comfortable space that functions for work is a tremendous asset in the eyes of buyers.
It’s not always what you can add to a home that’s most important. Sometimes, it’s what you can take away that boosts its value. This may mean tearing down old wallpaper or removing a useless island in order to streamline the floor plan. In order to activate the space, focus on making it more efficient.
The Citi team knows how much work can go into buying, selling and owning a home. Click here to learn more about how you may be able to move into the home-selling process with the confidence and knowledge you need.
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