Should You Renovate Your Home Before Selling?

If you plan to maximize the value of your home with a view to reselling it later, consider investing in low-cost projects with a high return. On the other hand, if your goal is to create a space that adapts to your unique lifestyle, you might consider projects aimed at increasing the comfort and utility of your living space.

Which home renovations are worth the investment?

The renovations worth investing in are those necessary to prepare your home for a potential buyer. Depending on the current condition of your home, this could mean making major repairs or refreshing the overall aesthetic of the home to a more timeless look.

“Buyers want to make sure they aren’t incurring any additional costs when buying a home,” says Jill Franks, senior interior designer and project manager for Freemodel — a California-based home renovation company dedicated to maximizing property values.

There are several home renovations to consider that will add value to your home, but finding one with a high return on investment will help you determine the best use of your budget.

Build an addition

Add a new bathroom

average cost: $80,000

Average value: $50,000

return on investment: 63%

The total cost of the project depends on whether you want to add a full bathroom with a bath or shower, or half a bathroom with no shower. Depending on how many bathrooms your home currently has and how many bedrooms there are to bathrooms, adding an extra bathroom can make your home more comfortable if you’re planning to stay for a while, or add to the property’s value – especially if your home currently has one Bathroom has only one bathroom.

The cost also depends on whether you’re adding additional square feet to your home with an extension or freeing up space in your current floor plan. If you can find a way into your existing floor plan and the extra bathroom adds significantly to your property price, Franks says it can be a worthwhile investment.

Add a new bedroom

average cost: $172,500

Average value: $100,000

return on investment: 56%

Similar to adding a bathroom, adding a bedroom should only be considered if it will increase your comfort or property value by at least twice the investment cost, says Franks. This is due to the time it takes to obtain a permit to build the annex and complete the project.

This is also one of the most expensive home renovations a homeowner can undertake. However, if homeowners can find extra space in their existing floor plan to add an extra room, they may be able to reduce the cost and timeframe of the project, potentially making the investment worthwhile.

Redesign your kitchen

average cost: $80,000

Average value: $60,000

return on investment: 75%

A major kitchen remodel often involves tearing down the existing kitchen cabinets and countertops and replacing them with an updated floor plan. This is more expensive than a minor remodel, which can be as simple as adding a fresh coat of paint and upgrading the hardware.

If you’re planning on putting your home on the market, a little update on your kitchen might be just what it takes to freshen up the space for a potential buyer to introduce themselves to the home. However, one thing to keep in mind when selling is not to get emotionally attached to your personal aesthetic and stick with timeless colors and finishes so potential buyers can imagine living in the home for a long time.

Remodel your bathroom

average cost: $35,000

Average value: $25,000

return on investment: 71%

If space in your bathroom is limited, you can increase its functionality by renovating the current floor plan. This maximizes your existing square footage and is less expensive than building an additional bathroom from scratch. Refreshing your current space can also give your home a unique flair that sets it apart from other offerings on the market, says Franks.

Remodel your basement

average cost: $57,500

Average value: $49,250

return on investment: 86%

If you have an unfinished basement, you can greatly increase the value of your home by finishing the space. It increases the floor space of your home and can provide space to add an extra room in your home.

There is also the possibility of adding another living unit such as a mother-in-law suite or a rental unit. This project grew in popularity during the pandemic as more people needed a separate apartment for their family members to move into or were looking for an additional source of income to supplement their income, says Franks.

Renew the exterior of your home

new roof

average cost: $12,000

Average value: $12,000

return on investment: 100%

New garage door

average cost: $2,000

Average value: $2,000

return on investment: 100%

New vinyl trim

average cost: $18,300

Average value: $15,000

return on investment: 82%

New fiber cement cladding

average cost: $18,600

Average value: $16,000

return on investment: 86%

Replacing your roof and side panels often brings a high return on your investment as they are necessary repairs that can last for decades. You can also increase the overall energy efficiency of your home, which will reduce your electricity bills. Replacing your garage door not only increases curb appeal, but also gives you the opportunity to incorporate smart technology that allows you to remotely close your garage door if you forget.

“Buyers today want to walk into a home and feel like even if it’s not cosmetically their dream home, they’re walking into a home that they can actually live in for a while before they have to spend any money,” Franks says.

Replace doors and windows

New steel entrance door

average cost: $3,150

Average value: $2,000

return on investment: 63%

New fiberglass front door

average cost: $3,500

Average value: $2,100

return on investment: 60%

New vinyl windows

average cost: $30,000

Average value: $20,000

return on investment: 67%

New wooden windows

average cost: $48,000

Average value: $30,000

return on investment: 63%

Replacing your front door can improve the overall look of your home, but it’s not such a wise investment since buyers are usually just concerned with whether the front door is functional, says Franks.

If you have enough in your budget, consider replacing your windows instead. Energy efficient windows help insulate your home and prevent extreme weather conditions from seeping through. On average, replacing old windows reduces your energy bill by 12% – which is good news for potential buyers and will increase the overall value of your property.

Large vs. small renovations

Big Renovation: Means a major or dramatic change in the structure of your home. Due to the scale of the project and the materials used, major renovations and remodeling generally cost more than minor updates.

Small renovation: Focuses on cosmetic changes to your home’s existing structure. Minor renovations can be more cost-effective than larger renovations because they generally focus on changing small details to freshen up a space, such as a bathroom interior. B. replacing hardware or flooring.

take that away

Home renovation projects like replacing your roof and siding are a surefire way to recoup almost your entire investment. But other projects — like building an addition for a bathroom or bedroom — can cost you more than a buyer is willing to pay.

When considering where in your home to invest your money, you should first think about the goal of your project. “The idea with remodeling is if you stay in this house, then make it your dream home,” says Frank. “But if you’re selling it, it’s to maximize the dollars in your pocket.”