Many people are concerned about the resale value or return on investment when renovating their homes. Whether you want to sell immediately or plan to stay in your home often impacts the improvements you’re willing to make.
If you want to sell your home and don’t want to spend the time, money or effort on repairs, then contact us and ask about selling your home as is. We will buy houses in any condition and can offer you a no-obligation offer in 24 hours.
Generally speaking, improvements made to the interior of your home don’t provide a high return on investment and, on average, a return on investment of 70%. One reason for this is that people are much more particular about the interior of their home than the exterior. They are willing to purchase a house with an exterior that doesn’t necessarily match their aesthetic but is neat and structurally sound. The same cannot be said for the interior, which homeowners are more likely to want changed to suit their needs and tastes. For these reasons, interior updates don’t have the sales ROI exterior improvements do.
However, you can upgrade the home to improve its resale value and decrease its time on the market.
Energy Efficient Improvements
Improvements that increase the home's energy efficiency have some of the highest ROIs as they often involve major renovations and increase the cost of the house. They not only help with the overall resale value but can also make the home sell faster. Energy efficiency is a more ‘modern’ feature that appeals to many homeowners.
The Inflation Reduction Act of 2022 introduced rebates to increase whole-house efficiency and appliance rebates, making improvements more cost-efficient for many homeowners.
Update HVAC/Electrification
Switching the HVAC system to electric has the highest potential ROI at 103%, and costs roughly $17,000 to update for a median-sized home. Electrification is changing the HVAC system to use electricity rather than fossil fuels to heat and cool the house. Benefits include reduced emissions. Electric HVAC systems can also be quieter than their fossil fuel counterparts in some cases.
Electrification need not be 100%. Some solutions provide a hybrid option, often utilizing a heat pump.
Replace Windows
Replacing wood windows is one of the best ROI home improvements in Southern California. In LA, the replacement cost averages $15,000-$30,000, and you can expect to recover up to 70% of the total cost. Replacing wood windows not only improves the heating/cooling efficiency of the home but can also add to its beauty.
Typically, wood windows are replaced with vinyl windows, which are both efficient and affordable. Vinyl windows come in various sizes and styles, from traditional panels to extensive modern options. Vinyl windows are durable and handle the elements well. They are also low maintenance and don’t need more than a pressure wash once a year to keep them looking their best.
Replace Appliances
If your appliances are in relatively good condition, it may not be worth replacing them. However, there are a few scenarios in which appliances may be worth it.
- If the existing appliances are not functional
- If the appliances are older and mismatched (especially in the kitchen)
- If you are adding a dishwasher where there previously was not one
- If you plan on taking the appliances with you when you move
- If you qualify for an energy-efficient appliance rebate
- You are in a buyer’s market
Kitchen Remodel
The kitchen can be one of the most expensive rooms to remodel due to the high cost of the cabinets, countertops, and tile. This is even more true if you need to update the plumbing to accommodate a different location for appliances and sinks. A midrange kitchen renovation focused on basic upgrades can yield the best return on investment. This can include replacing outdated cabinetry and finishes and improving the layout.
The average cost of a basic kitchen remodel in California is just over $26,000, and the potential ROI is 86%.
New Cabinets
Updating new cabinets is a great way to change the look and functionality of your kitchen. Cabinets that are run-down or made of cheap materials can be offputting to prospective buyers. However, you may only need to scrap some of what if the cabinet boxes are in good shape. In that case, you can update the cabinets with new front and hardware with an ROI up to 70%. Even a fresh coat of paint can change the look of the kitchen.
The takeaway is to use as many elements of the existing cabinets as possible, as long as they’re in good condition.
New Countertops
Much like cabinets, it’s best to keep good-condition countertops. However, if the countertops are in bad condition or dated, replacing them with a mid-range option will be your best bet. Also, look for ways to increase the total amount of countertop space, as that will increase the ROI of the new countertops. If you have the space, adding additional counter space through a stationary island or rolling kitchen cart can also be a great way of increasing counter space without changing the existing countertops.
New Appliances
We covered this briefly in the last section, but new appliances don’t have a great ROI in the kitchen. However, replacing older, mismatched appliances can remove a deterrent for prospective buyers, especially in a market that favors them.
A dishwasher, in particular, has a low ROI, but putting in a dishwasher where one previously was not is a great way to add value to the home, so long as the electrical and plumbing modifications to accommodate the change aren’t too challenging to accomplish.
Bathroom Remodel
Like kitchens, bathroom renovations can significantly impact the home. Done right, bathroom remodels can have up to a 70% ROI. Midrange bathroom remodels will give you the best return on your investment. The focus should be increasing function, addressing any broken or poor-condition items, and updating outdated elements.
Bathroom Additions
If you have the option, creating a new bathroom is a better investment than updating an existing one. This is especially true if the number of bathrooms doesn’t make sense for the number of bedrooms or the size of the home. Additional bathrooms significantly increase the functionality and enjoyment of the house, something significant to prospective buyers. This is especially true if you live in a neighborhood that attracts families with young children.
Bathtub/Shower Upgrades
If the current bathtub or shower is dated, it is best to refinish or upgrade it to look cleaner and more modern. As long as the existing shower/tub is in good condition, there are a few economical options for updating it, including replacing walls with shower surround panels. If the system is in poor condition, you’ll want to update to a new shower or bath. If the layout permits, then upgrading to a walk-in shower is a great option as it provides more ease of use.
Vanity and Countertops
Often the most economical option for vanities and countertops in the bathroom is to update what’s existing. Like kitchens, cabinets in good condition can be refinished or have their fronts replaced. Dated countertops can be replaced with more modern options. This is often an economical option for bathrooms which don’t have as much countertop space as kitchens.
If possible, consider increasing the bathroom's functionality. This can include switching the vanity to a double sink, increasing the storage, or adding shelving.
Upgrade Fixtures
Upgrading the fixtures in a bathroom can be an economical way to update the look of a bathroom. This can include faucets and showerheads, especially if they are more functional or modern than what’s existing. You’ll just want to ensure you’re still matching the bathroom style. Additionally, you can change out the cabinet hardware with new knobs or pulls, which can update an otherwise outdated vanity design. New lighting is also a great way to freshen up a space.
Flooring
New flooring is one of the most impactful changes you can make, and you can potentially recoup 100% of the total cost. The highest ROI comes from installing hardwood flooring, especially if it’s replacing vinyl or carpet. Refinishing can also be a great option if the floors are hardwood and in good condition.
Finish the Basement
Finishing the basement is a great way to increase the functional square footage in your home. Many potential buyers expect the basement to be finished, especially in more affluent neighborhoods. On average, you’ll recoup 70% of the cost of finishing the basement.
Focus on drywall, flooring, paint and heating to make the space functional.
Painting
Painting is a great way to freshen up the home and give everything a clean look. If the paint is looking faded, discolored, or stained, then painting is an impactful way to increase the appeal of the home.
The average cost to professionally repaint a home is $2 per square foot of living space, though the complexity and existing color are all factors in pricing. Though you’re likely to recoup most of the painting cost, it is an excellent option if you have the time and can paint neatly.
If you don’t want to repaint, then cleaning the walls can give them a freshened appearance, though it won’t hide holes and chips.
If you need to sell your home but don’t have time to make improvements, then Haven Homebuyers may be the right solution. We buy houses in any condition and can close in as little as five days. Get your free no-obligation offer today.
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