A common home remodeling mistake that homeowners make is failing to consider ROI when planning out the project. While some people plan to grow old in the current home, the majority will sell at some point and when they do, they won’t get as good a return on their remodeling investment if they haven’t considered ROI. Here are a few tips for getting more ROI out of a remodel.
Though there’s something to be said for home improvement projects that improve a home aesthetically, it’s the functional improvements that make the home’s value increase the most. Improved lighting, better storage solutions, and more durable kitchen counters are all examples of functional upgrades that add value to the home.
Less is more
All of the latest research points to the fact that the less expensive, simpler projects often yield the higher returns. Many mistakenly assume that the more money you put in, the more money you’ll get back but the opposite is often true. Some of the most popular remodeling projects like a major kitchen or bathroom remodel are among the most expensive and complicated but yield a return of just 60 to 70%. Compare that to an entry door replacement or upgraded lighting which might cost several hundred dollars and a single afternoon but will yield a return of 90% or more. Other inexpensive projects you might consider are manufactured stone veneer for your home’s exterior, baseboard radiator covers, or repainting kitchen cabinets.
Don’t outdo the competition
This may sound counter-intuitive, but when you remodel with ROI in mind, you don’t want to add a ton of features that the neighbors don’t have. If the value of your home far surpasses surrounding homes, you’ll never be able to get fair market value for those upgrades. Instead, focus on bringing your home up to the standard in your community. Granite countertops, an extravagant pool, and other luxurious upgrades may be fun for you and your family, but if they stand out in your neighborhood, don’t expect to get much of your money back for them.