The purpose of home renovations is to make it more inviting to live in and increase its market value. In fact, every renovation you make has the potential to boost the value of your home. Whether you sell next month or next decade, some renovations provide permanent value, and some provide value that blends into the home over time. Beautiful home renovations increase the appeal and fall-in-love power over buyers while practical renovations and home upgrades increase its property and maintenance value – as well as appeal to modern buyers.
How Home Renovations Provide ROI
ROI stands for Return On Investment, meaning the amount you get back for how much money you put in. Most home renovations return a little less than the total cost of the update. For example, a $15,000 kitchen renovation with an ROI of 75% will add about $11,250 to the home’s next selling price from the new style, new materials, as well as feature upgrades.
The exceptions are renovations that drastically increase the value of a home, often through repairs and low-investment expansions. Home flippers, for example, take shabby homes and – with a few well-chosen updates – bring them back into residential market value. Taking a home from off-market to on-market quality often results in a different level of project selection and ROI.
What Causes the Best ROI for Home Renovations?
- Update the architectural style
- Modernise with fixture and tech upgrades
- Renovations that enhance the home’s beauty
- Back-to-neutral design
- Turn a flaw into a feature
- Strategise your renovations for ROI
- Designer-builder completion
Updating Your Home’s Architectural Style for ROI
Over time, our taste in home architecture has changed. A few decades ago, homeowners loved a separate room for everything. Parlours, dens, dining rooms, private kitchens, and sunrooms separated the shared family spaces. Today, we love open floorplans with sprawling shared spaces and entertainer kitchens. In some homes, knocking down a few walls is the best ROI upgrade you can choose.
Help your buyers see the true potential of your square footage by removing those separating walls and creating an open floor plan. While you’re refinishing the walls, create artistic doorways, archways, and supportive columns that both modernise your home’s style and provide the support needed when those walls are gone.
The ROI of Feature Upgrades and New Home Tech
Tech upgrades depend on the value and appeal they provide. Some tech and fixture upgrades make a big splash. A low-cost light fixture might transform your living room, but a smart lock can be hit-or-miss with buyers who may not embrace the complete smart-home experience. However, tech upgrades significantly increase the value of the home’s essential tech. For example, replacing an old water heater or HVAC unit adds real value – thousands of dollars in many cases, to the home’s property value.
However, if you’ve already got the wall open, you might as well throw in a USB-ready outlet or beautiful new sink faucet.
Creating ROI by Enhancing the Home’s Natural Beauty
The original builders of a home rarely fully capture the home’s potential for beauty, especially as more renovations are made. Every room can flow beautifully into the next, the lines drawing the eye up and to the most beautiful spaces in each room. Renovations give you the opportunity to find the most beautiful lines in your home and enhance its whole aesthetic appeal.
Use new designs to create that fall-in-love sensation with buyers that inspire higher bids and more passionate negotiations. In some homes, the right artistic renovations can transform a home’s appeal and ROI with great results.
The Trick of Return-to-Neutral Design
Home renovations are usually for your own joy in the home, but everyone also knows that too-personal design can actually decrease a home’s value. This is because a highly personal design might not speak to your buyers the same way it speaks to you. The good news is you don’t really have to compromise. What you need are return-to-neutral design techniques. Return-to-neutral design is a beautiful interior style that can be altered from highly personal back to neutral.
A room designed for a dramatic accent wall, for example, can feature your favorite color, artwork, or a dramatic curtain. That same wall can be repainted to a warm gold-beige when it’s time to sell. Then your buyer can repaint that same space with the dramatic accent color that means the most to them.
Turning a Flaw Into a Feature
The best ROI always comes from transforming a flaw into a feature in your home. Damage to the home reduces value, repairs level out the value, and renovations improve value. Why not turn every repair into a renovation?
At a minimal cost increase, you can make positive changes to any space you’re already doing work in. Let’s say you’re replacing a water-damaged wall in the bathroom. You have every opportunity to upgrade the wall, trim, plumbing behind the wall, insulation, and the fixtures coming out of the wall at the same time, as opening the wall is often the biggest barrier to making some of your best upgrades.
Optimise ROI with Home Renovation Strategy
The right renovations for the best ROI will be different from house to house. However, the best ROI comes from making smart strategic decisions about which renovations will provide great returns and which are going overboard. Common over-spending mistakes include elaborate kitchens, designer tiles, and exotic building materials. On the upside, upcycling with restored and sustainable materials is the hot trend and is great for savings.
Choose the renovations that will have the most impact and style for the least cost.
Working with a Designer-Builder to Maximise Your ROI
The best way to ensure that your renovations are both beautiful and cost-effective for your home’s ROI is to work with a designer-builder. Unlike general contractors, designer-builders are there to make your vision a reality – not just fill your requests. Share your vision with your designer and talk about the possibilities, costs, and returns of each renovation you want to try. Explore several designs, choose your favorite, and then trust your designer-builder to lead a trusted team to bring your renovations into reality.
Contact us today to consult with a designer-builder to optimise the ROI of your home renovations.