People who want to remodel their homes but are not sure where to start often ask, “What are the most valuable home improvements we could make?” or, “What will give us the best return on our investment?” Our answer: that depends on your definition of “value” and “return.”
As custom builders, we strive to learn a client’s goals and objectives before we embark on a remodeling project with them. Usually there is some challenge within the home that they want to overcome. The home has proven to be less efficient than they had hoped, too small, too enclosed, too… something. If the best solution is a renovation, then that renovation has value to the client. We want to make sure that clients are putting their hard-earned money – their treasure – into something that’s worthwhile and lasting for them. If you’re planning to move in two years, how much is it worth for you to spend your treasure on a complete kitchen remodel or adding a second-story bedroom? That kitchen remodel will certainly increase the value of the home in the marketplace, but you may not recoup it dollar for dollar. However, if you are going to utilize the kitchen for entertaining, frequent cooking, and as the “hub” of your home in the next few years, it will contribute to a more enjoyable lifestyle. The improvements will make your life easier and it will be worth your investment. The functionality of that new kitchen is more valuable than the straight dollar calculation. It is one of the intangibles of remodeling.
Any renovation or upgrade to a home is valuable. It’s valuable to the owners, because it addresses a need they’ve identified. It’s valuable to the prospective buyer because it’s newer and won’t need upgraded any time soon. In the remodeled kitchen example, if your kitchen has needed updated since you bought the home 10 years ago, it’s probably something a prospective buyer would also consider – having an outdated kitchen could be a major deal-breaker if the buyer thinks he has to sink another $50,000 into a new kitchen. Having already updated the kitchen will not only make your life easier and more enjoyable until you sell the house, it will also be included in the selling price of the home, saving the buyer the angst of having to negotiate the price down. A renovation will have a return on investment if it helps overcome a challenge in the home.
According to a recent study released by HGTV, you can recoup 60-120 percent of your investment in a remodeled kitchen. If your kitchen is severely out-of-date, it only makes sense to upgrade it – both for your own use and for resale value. A seamless addition is always best both from an aesthetic standpoint and at resale. That same HGTV study showed you can recoup 80-130 percent of spending on a bathroom addition. It’s especially worth it if you only have one bathroom, but even if it’s the addition of a third or fourth bath, it is still valuable. It improves your quality of life while still living in your home, and it makes the home more marketable for a prospective buyer. That second-story bedroom and the outside landscaping and home improvements like new roof, new siding and new energy-efficient windows were also on the list of good home investments. We say, if the remodeling effort will benefit you for years to come, then it’s worth the investment.