What Renovations Increase Home Value the Most?

My mentor said that “Owning a home is a privilege, and not everyone gets that.” When I started in the business, I didn’t understand the significance of this sentence. But after years of buying homes for cash, I realize the relevance.

Types of Home Renovations

“So if it’s so easy to increase the value of my property by undertaking renovations, why don’t I start right now, Alex?”

“Well, not all renovations offer the same return on investment. It’s not that simple.”

Some projects offer more returns compared to others, so it’s best we learn about them before we hire contractors and designers.

1. Basic Home Makeover 

As the term suggests, this refers to the fundamental repairs and replacements of any damaged parts of the house.

2. Curb Appeal Improvements

Jon emphasizes that “the curb appeal has to be near perfect.” It’s the first look of your home, and improvements to the curb appeal make a huge difference when selling a property. According to several of our clients, “curb appeal is what affects the impression of the property.”

I know that’s not fair to judge a book by its cover, but “if you want to sell your home fast, the cover matters.”

3. Value-Added Home Renovations

Real estate experts reveal the following home improvement projects with the highest ROI (Return on Investment) during a resale. Such improvements offer around 80% or more of the total costs.

4. Personal Preference Home Improvements

Now, personal improvements are those that you want for yourself but won’t necessarily impact the value of your home. Some professionals in the industry think of these renovations as unnecessary.

These are often high-maintenance. They may not lower the resale value, but they won’t increase it either.

That being said, these kinds of home improvements are not bad to do. After all, they can make your home more attractive to potential buyers, especially family buyers.

What Renovations Increase Home Value the Most?

Well, in our opinion, certain renovations fetch more value than others. Here are the ones we recommend.

Home Addition 

Undertaking an addition to your home can add more living space AND value. My wife and I added a space above the garage. The design incorporated a studio apartment, which we were then able to rent.

Philadelphia has properties of all sizes. From skinny, cookie-cutter row homes to small apartments, it can be challenging to find a larger space. If you travel to New Jersey, you can find Newark apartments right across the state line that are more spacious.

For homeowners with single-family dwellings, another good addition is building a patio, porch, or deck area. Outdoor additions such as these can yield a 90% resale return. You also get to hang out comfortably and safely outside your home with friends and family before you sell!

Bathroom & Kitchen Renovations

Every individual is going to tell you that the kitchen and the bathroom are the busiest spaces in a house. In my home, that’s true. I am in the bathroom with my phone watching reels, meanwhile, my wife is in the kitchen, living room, patio, or any hidden rooms taking care of the tasks that I was supposed to do. I’m joking, I do get out of the bathroom and then help in taking credit for a clean house!

A 2019 report from the National Association of the Remodeling Industry states that a kitchen makeover can recover at least half of its total costs when selling the house. Buying new kitchen appliances and replacing the floor tiles may seem unnecessary, but it’s actually a must. Many appliances are more energy-efficient, which can help you save on monthly utility bills.

According to every other realtor, “Having small or outdated bathrooms can turn off potential buyers.” So, if you are planning to sell your house, upgrade the fixtures and plan for a bathroom addition. You could get as much as 102% on average on resale return.

Jon wanted to sell his parents’ house in Philadelphia, but the bathrooms were a mess. He remodeled the spaces, and the cost to upgrade was recouped through the sale price.

HVAC

Homebuyers do not want an HVAC system that is in poor shape. They also don’t like wasting money and time on HVAC repairs when it should have been the house seller’s responsibility in the first place.

A damaged or outdated HVAC system can be a major turn-off for buyers. So, invest time and money to ensure that it functions well before listing your home.

According to the folks over at ARS, you can easily notice HVAC system issues, such as cold instead of warm air coming from your blower or ductwork.

Final Thoughts

Trust me when I say that some renovations matter more than you think. If my wife hadn’t pushed me to add the space above the garage, I wouldn’t have been able to realize the true value of my property. If Jon hadn’t upgraded his parents’ home before it sold $7,000 over the asking price, they wouldn’t have gotten their fun two-week vacation in Aruba.

All you have to see is which renovation makes sense for your home, and then start when the time is right.