Home Upgrades Worth Making (Think: ROI!) | Real Estate Investing | Blog

Home Upgrades Worth Making (Think: ROI!) | Real Estate Investing | Blog

There are few better things to come home to than a freshly renovated kitchen with modern appliances and pristine cabinetry. Whether you’re enjoying your new kitchen, bathroom, or backyard addition yourself, or hoping to increase your property value in an effort to sell, there are a few home upgrades that make more of an impact than others. Before demo day begins, be sure to consult this guide to help you make the most of your home improvement budget.

In this post, we’ll be exploring different types of home upgrades and how they translate to ROI, as well as appeal to home buyers and tenants.

Garage Door Replacement

Depending on where you live, your garage door can easily be the focal point of your home from the street’s view. In fact, a garage typically makes up 30 to 50 percent of what’s seen from the street, which means improving its appearance is actually a pretty high-impact item when it comes to making home renovations.

What it means for buyers:

What it means for you:

According to Realtor.com, a garage door replacement has one of the highest ROIs at 98.3 percent, with a low job cost of $3,470. This means you’re making a cost-effective upgrade that has a huge impact on the value of your home.

Things to consider

When revamping your home’s garage door appearance, it’s best to consider the weather in your area before buying a new door. Materials like fiberglass have poor insulation and can become dull when exposed to harsh weather, hot or cold. Steel is actually the most popular material for garage doors thanks to its reasonable price, durability, and low maintenance.

You’ll also want to keep in mind which color you decide to paint your garage door as different buyers will have different tastes. Stick to neutral tones that match the rest of your home’s exterior and one that suits the feel of your neighborhood.

Landscape Improvements

If you live in an area where residents spend a lot of time outside, you may want to consider making some landscape improvements before selling or leasing your property. Just like a garage door, great landscaping adds curb appeal and can make your home more attractive to buyers and prospective tenants alike. Depending on the type of landscaping improvement you make, your property could see a reasonable or substantial value increase.

What it means for buyers:

What it means for you:

Changing up your home’s outdoor space can be as big or as small of a change as you want to make it. If you want to add a wood deck for example, you might expect a bill of just over $10,000 with an ROI of 82.8 percent. Or a xeriscaping project could end up making more sense for your budget.

Sacha Ferrandi, CEO of Source Capital Funding, offers this tip: “If you’re thinking about upgrading your home’s landscape, you should take a look at what’s popular in your neighborhood before starting the work. A xeriscaped front yard with cacti might not survive in your rainy climate, for example—creating more of a hassle for buyers rather than providing value.”

Smart Home Features

Smart home features may not have been on your to-do list of home renovations before, but they might need to be. Why? Home automation features like temperature control, home security, and lighting appeals to millennial buyers that are used to accessing just about everything they need to right from their fingertips.

Plus, integrated security systems add peace of mind for first-time homebuyers and families. In fact, 81% of homebuyers said they’d rather buy a home with smart home features already installed, according to Digitized Home.

What it means for buyers:

What it means for you:

According to HomeAdvisor, the average cost of a home automation system installation is between $381 and $1,771.

Things to consider

As smart home systems are becoming more and more popular, the options are becoming expansive. When choosing a home automation system, consider what features are going to be most useful for homebuyers in your area. For example, remote AC control might not be as useful in a cold place like Seattle, but maybe lighting control would be.

Backyard Deck

Another home upgrade on the lower end of job costs is a backyard deck addition. This project has a national average cost of just under $11,000, with an ROI of 82.8%, according to realtor.com.

What it means for buyers…

Brian Kelley, VP of BCCU, offers this pro tip: “Compared to other projects like a major kitchen remodel or a master suite addition, a backyard deck addition still resides on the cheaper end of the spectrum, with a substantial ROI.”

Things to consider

If you live in an area where residents might not spend a lot of time outside, building a new deck may not be as much of a property value increase than a bathroom remodel or other comparable project. You will also want to take weather into consideration as you choose materials for your deck. If you live in a super wet climate, wood may not be as sustainable as a polyvinyl chloride (PVC) material.

Minor Kitchen Remodel

The kitchen is most often the center of your home—it’s the place you cook meals, kids do homework, and friends and family gather. That’s why kitchen remodels are amongst the most popular (and most expensive) home upgrades. Now, you don’t have to replace every cabinet, backsplash, or fixture to boost your home’s market value. A few simple upgrades and modern enhancements could do the trick to make your home more appealing to buyers.

What it means for buyers:

What it means for you:

A minor kitchen remodel is what you make of it! A few simple changes like swapping out cabinet pulls and new appliances automatically make the kitchen look newer. Another low-budget change is simply taking the doors off of main dish cabinets for a more open, modern feel.

Things to consider

When visualizing a design for your new kitchen, be sure to choose features that will appeal to the general homebuyer’s market. A pink kitchen, for example, might be your dream—but it could turn off potential buyers when it’s time to sell.

Increasing your property’s value doesn’t have to mean a full on HGTV-scale remodel. With these tips, you can make an upgrade that fits into your budget and gives you a great return on your investment!

What other renovations do you think offer the most bang for your buck? 

I’d love to hear from you in the comment section!

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