Should you renovate your house before selling?

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Which home renovations are worth splurging on depends on your goal for the project and your budget.

If you plan to maximize the value of your home to resell it later, consider investing in low-cost projects with a high return on your investment. On the other hand, if your goal is to create a space customized for your unique lifestyle, you might consider projects dedicated to increasing the comfort and usability of your living space.

What home renovations are worth the investment?

The renovations worth investing in are those that are necessary to prepare your home for a potential buyer. Depending on the current state of your home, this could mean completing essential repairs or updating the overall aesthetic of the home to make it look more timeless.

“Buyers want to make sure that when they buy a home, they won’t have additional costs,” says Jill Franks, lead interior designer and project manager at free model—a California-based home renovation company dedicated to maximizing property values.

There are several home renovations to consider that will increase the value of your home, but finding one with a high return on investment will help you determine the best use of your budget.

build an addition

Add a new bathroom

Average cost: $80,000

Average value: $50,000

Return of investment: 63%

The total cost of the project will depend on whether you want to add a full bathroom, which includes a tub or shower, or a half bathroom, which does not. Depending on how many bathrooms your home currently has and the bedroom to bathroom ratio, adding an additional bathroom can make your home more comfortable to live in if you plan to stay for a while, or increase property value, especially if your home currently it has only one bathroom.

Cost also depends on whether you’re adding additional square footage to your home through an addition or by making room in your current floor plan. If you can find a way into your existing floor plan and the additional bathroom adds significant value to your real estate price, then it may be worth the investment, says Franks.

Add a new bedroom

Average cost: $172,500

Average value: $100,000

Return of investment: 56%

Like adding a bathroom, adding a bedroom is something to consider only if it increases your comfort or property value by at least twice the cost of the investment, according to Franks. This is due to the time it takes to obtain a permit to build the addition and complete the project.

This is also one of the most expensive home renovations a homeowner can undertake. But, if homeowners can find additional space within their existing floor plan to add an extra room, they may be able to reduce the cost and schedule of the project, which can make it worth the investment.

remodel your kitchen

Average cost: $80,000

Average value: $60,000

Return of investment: 75%

A major kitchen remodel often involves tearing down existing kitchen cabinets and countertops and replacing them with an updated floor plan. This is more expensive than a minor remodel, which could be as simple as adding a fresh coat of paint and upgrading the hardware.

If you’re planning to put your home on the market, a minor update might be just what your kitchen needs to refresh the space so a potential buyer can envision themselves in the home. But, one thing to keep in mind when selling is to avoid getting emotionally attached to your personal aesthetic and stick to timeless colors and finishes so prospective buyers can envision living in the home for a long time.

remodel your bathroom

Average cost: $35,000

Average value: $25,000

Return of investment: 71%

If your bathroom is short on space, you can increase its functionality by revamping your current design. This maximizes your existing square footage and is more cost effective than building an additional bathroom from scratch. Updating your current space can also add a unique style to your home that makes it stand out compared to other listings on the market, Franks says.

remodel your basement

Average cost: $57,500

Average value: $49,250

Return of investment: 86%

If you have an unfinished basement, you can significantly increase the value of your home by finishing the space. Increases the usable spaces in your home and can provide space to add an extra room to your home.

This is also an opportunity to add an additional living unit, such as a mother-in-law suite or rental unit. This project became increasingly popular during the pandemic, as more people needed a separate space for family members to move into, or were looking for an additional stream of income to supplement their earnings, Franks says.

Renew the exterior of your house

new roof

Average cost: $12,000

Average value: $12,000

Return of investment: 100%

new garage door

Average cost: $2,000

Average value: $2,000

Return of investment: 100%

new vinyl siding

Average cost: $18,300

Average value: $15,000

Return of investment: 82%

New fiber cement siding

Average cost: $18,600

Average value: $16,000

Return of investment: 86%

Replacing your roof and siding often generates high returns on your investment because they are necessary repairs and can last for decades. You can also increase the overall energy efficiency of your home, which lowers your utility bills. Changing your garage door not only adds curb appeal, it also gives you the opportunity to incorporate smart technology that allows you to close your garage door remotely if you forget to.

“Buyers today want to walk into a home and feel like, even if it’s not their dream home cosmetically, they’re walking into a home that they can actually live in for a while before they have to spend any money.” says Franks. .

change doors and windows

New steel entrance door

Average cost: $3,150

Average value: $2,000

Return of investment: 63%

New fiberglass entry door

Average cost: $3,500

Average value: $2,100

Return of investment: 60%

new vinyl windows

Average cost: $30,000

Average value: $20,000

Return of investment: 67%

new wooden windows

Average cost: $48,000

Average value: $30,000

Return of investment: 63%

Replacing the front door can improve the overall appearance of your home, but it’s not such a wise investment since buyers typically only focus on whether the front door is functional, says Franks.

Instead, if you have enough in your budget, consider replacing your windows. Energy efficient windows help insulate your home and prevent extreme weather conditions from seeping in. On average, replacing old windows reduces your energy bill by 12%, which is good news for potential buyers and will increase your overall property value.

Major renovations vs. minors

Major reform: It involves a large or dramatic change in the structure of your home. Major renovations and remodels generally cost more than minor updates due to the scope of the project and the materials used.

minor reform: Focuses on aesthetic changes to the existing structure of your home. Minor renovations can be more cost-effective than major renovations, as they typically focus on changing small details to freshen up a space, like replacing hardware or flooring.

Food to go

Home renovation projects, like replacing your roof and siding, are a surefire way to recoup almost all of your investment. But, other projects, like building a bathroom or bedroom addition, can cost you more than a buyer is willing to pay.

When considering where in your home you want to invest your money, you must first consider the goal of your project. “The idea of ​​renovating is if you’re going to stay in that house, then make it your dream house,” says Frank. “But if you’re selling it, it’s to maximize the dollars in your pocket.”

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