Choosing renovation over a new homeWe love our house, but just as much, we love our neighborhood and our neighbors. So instead of looking for a new home, we decided to look into renovating what we have. While we have a general idea of what we want our renovated home to look like, it’s become clear to us just how many decisions we’d have to make to make that vision a reality.
Some are easy—like how many sinks do we need in the master bathroom? The answer is two, definitely two.
But some questions are hard to answer—would upgrading to marble counters be worth the expense?
That’s what many of our questions came down to: would this be worth the cost? So, we’re looking at that question in two ways:
We have no plans to sell, but we do want to make sure that the projects we’re doing would add to our asking price if those plans ever changed.
Any homeowner who’s considered a renovation has wondered the same thing. Each year, Remodeling magazine releases their Cost vs. Value Report and it’s extremely helpful when making renovation plans. In their 2020 report, the upgrades that saw the highest returns on investment (ROI) were:
This project involves adding a faux stone exterior to your home, a popular design trend over the last few years. The national average cost for this project is $9,357 and the additional resale value added to your home is $8,943, meaning you can recoup a whopping 95.6% of the cost. It can completely change the face of an old house, explaining why it is such a beneficial renovation.
Replacing a boring garage door with a more premium looking model is a quick way to revitalize your curb appeal. And this project not only improves the look of the garage door, but also how well the mechanical parts function as well. No one wants to move into a home with a rickety, shaky, loud garage door.
Upgrading the kitchen has always been seen as a great investment in terms of tacking on zeros to your home’s sale price, especially when it’s done well. The greatest ROI for this type of project is a minor kitchen remodel, which involves keeping the layout of the kitchen similar, but upgrading cabinet facing and countertops, and adding a new refrigerator and oven-range. For an average price of $23,452, the resale value added is $18,206, a 77.6% cost recoup.
Spending more in your kitchen doesn’t exactly mean you’ll make more in the long run, as a major kitchen remodel and an even more upscale major remodel will allow you to recoup 58.6% and 53.9% of your investment in a sale, respectively. Not bad, but not as high as the minor remodel.
When you think about the projects you’d like to do around your house, you probably aren’t getting excited about upgrading your siding. But replacing siding, with either cement or vinyl materials, are projects that have a high ROI. And think of it this way: new siding will improve your curb appeal.
Much like the kitchen renovation, a bathroom renovation is known to give you a good ROI. And also like the kitchen, the midrange upgrade is the most financially beneficial project. Going upscale, and adding more square feet to your bathroom, (which is what we’re hoping to do in our home) will allow you to recoup a little less of your investment, but still appreciable at 56.6%.
A universal design bathroom renovation includes many of the same upgrades as an upscale renovation, but also includes many accessibility improvements that will make the bathroom more usable, and more valuable, to elderly people and those with disabilities. That helps explain why the ROI on this type of upgrade is 62%.
Our big goal for our renovation project is to build up into our attic and create a new master suite. Of all of the projects on the Cost vs. Value Report, this is definitely the biggest ticket item. Considering the amount of money that we’d be spending, these numbers have us sweating. We want to make sure we’re investing wisely.
However, knowing that the ROI of building up is still strong, at 51.6% to 58.5%, helps us feel a little better about our decision. And the difference we’ll feel every day, when we no longer have to say “excuse me” to each other as we’re getting ready in the morning, or simply brushing our teeth, will be well worth the investment for us.
Have you been considering a renovation project? Start by learning about your reno loan options and talk with a loan professional to set your budget and start getting a scope of what’s possible.
