One factual reality about home renovations which you should know is that they don’t always assure profit gains or interest. Whenever you allocate your money to home repairs, there’s usually an opportunity cost, ranging from the possibility of overcapitalization or greater return on investment. To avoid the negative impact of home restoration, it’s imperative to know some cost-wise home improvements which can also offer you the best return on investment.
Besides, if you’re trying to repair your property for personal goals or business purposes, it’s better to always choose where you can benefit the most. If you’re trying to improve the property you live in to sell it, consider contacting a local real estate investment firm or a cash buyer like Avante Home Buyers instead for efficient and streamlined transactions.
If you’re set on renovating, here are five home improvements that offer the highest return on investment.
1. Kitchen and Bathroom Improvement
The part of your home which typically sees a lot of usage is the kitchen. Most people consider it the busiest part of their homes, and the most expensive area in construction. In terms of home renovation, believe it or not, allocating your money into a kitchen remodel doesn’t require too much effort on your part. With the right renovation plan and ideas, you can recoup as much as 77%-100% of your investment.
The average cost of a minor kitchen remodel is around USD$15,000, whereas a USD$22,000 gain on investment has been netted on resale in some American cities. Investing in this project not only allows you to have a superb kitchen, but also have a greater chance for higher returns on investments.
On the other hand, a bathroom upgrade allows you to save money and space. For example, all-wood cabinets, natural wood or stone floors, and stone countertops have long been used for cost-efficient bathroom renovation. However, some realtors advise the use of a second bathroom instead of spending your money on a single bathroom.
2. Room Addition
Additional rooms and suites have long been a persuading factor for potential buyers to purchase a certain property. Room addition though requires additional budget so the owner can be assured a higher possibility of resale. In particular, adding a room in your house which includes a spacious bedroom, walk-in closets, and a full bathroom can cost up to six figures. But once accomplished, potential buyers will be eager to pay top dollar for your property.
Aside from this, adding a room or two is a good form of investment, especially if you live in a hot housing market. Whether it’s adding a sunroom or doubling the size of your home, most people now aim for a room addition rather than looking for a larger house.
This alternative is significantly beneficial for people who are looking for more space in their homes but are now on a tight budget and can’t afford a larger house in the neighborhood. Investing in room addition results in a greater possibility of resale, aside from around 30% cost recovery for every 1,000 square feet added to a home.
3. Roof and Window Replacement
New roofs and windows not only help in securing your house but also aid in efficient energy saving. In terms of adding curb appeal to your house and attracting potential buyers, a classic wooden window is said to be more advantageous than other window materials. For example, most people prefer wooden windows over vinyl. While this may be a little pricey, investing in a wooden window attracts potential buyers who prefer the natural look of wood.
Also, the average cost of a roof and window replacement is around USD$21,000. From this price, you can expect a raise of around USD$14,000 in resale value, which indicates a recovery cost of 68.9%.
Allocating your money into roof and window improvement not only means having a secure and more livable house, but it’s also a great source of investment for people who want to enhance their own homes and those in the real estate businesses.
4. Garage Door Restoration
You might not think of garage door installation when you initially consider upgrading your home. However, this particular improvement significantly indicates one of the highest returns you can have. Most people, especially those in the real estate business, allocate some of their budgets on installing cost-efficient garage doors which also are durable and heavy-duty.
In particular, steel is a popular material for garage doors. Aside from its reasonable price, steel is largely known to be the ideal door material, especially for people who want a durable and low-maintenance door that’s also available in any style that they like. Investing in a steel garage door helps add curb appeal and functionality to your home, not to mention that it’s long-lasting and sturdy.
Besides, the average cost of a new set of garage doors is around USD$3,000, with a probable cost recovery of 94.5%. Apart from having a highly-functional garage door, it’s an ideal investment.
5. Backyard Upgrades
Backyard upgrades are crucial to an efficient home renovation. Allocating your money to build a well-organized backyard patio with an outdoor kitchen, flagstone pavers, and a fire pit makes for a praiseworthy and attractive house. Whether you invest in this project to improve the space where you live or for future resale, this option is an investment where you can gain a higher return on expenditure.
Furthermore, having an intricate backyard patio allows you to attract a greater number of potential buyers and guests. Remember, if you fail to give a pleasant impression to the people who’ll pass by your home, you’ll also fail to make them come and enter your abode. This saying speaks to the importance of your home’s aesthetic appeal and making it more habitable and comfortable to live in.
Be it a kitchen or bathroom remodel, roof and window installation, or a backyard upgrade, any alternative in home improvement can also be a great form of investment. In particular, allocating your money to various home renovations not only serves as a good investment for most people but also allows them to make their homes more livable and convenient to live in.
Also, knowing which home improvement can offer you the highest return on investment allows you to maximize the funds and resources available at your disposal. Aside from determining which can be a better investment, knowing this also helps you learn about which mistakes you should steer clear of.