If you’re considering a renovation, it’s wise to focus on upgrades that add value to your home while also improving your day-to-day life. Whether you’re thinking of adding a bedroom, remodeling the kitchen, or adding eco-friendly features, here’s a guide to renovations with the highest return on investment (ROI).
1. Adding Bedrooms and Bathrooms
Adding extra rooms is one of the most impactful ways to increase a property’s value. Properties with additional bedrooms and bathrooms are particularly appealing to buyers, especially in family-friendly markets. Adding extra bedrooms and bathrooms not only increases living space but also broadens the home’s appeal to a wider pool of buyers, especially families, multi-generational households, and investors. Families with children appreciate the flexibility of additional rooms for bedrooms, home offices, or play areas, while an extra bathroom enhances convenience and daily flow. For investors, more rooms increase the property’s rental potential, allowing for a higher rental income and attracting renters looking for ample space. Altogether, these upgrades make the home more versatile, appealing to both primary residents and those seeking profitable rental opportunities.
- ROI Tip: Adding a half-bath can increase a home’s value by up to 10%, while an additional full bath can offer an ROI of 5-15%.
2. Kitchen Remodels
The kitchen often stands out as the heart of the home, so upgrades here tend to provide substantial returns. Minor renovations like updating appliances, replacing countertops, and refinishing cabinets yield a great return on investment. In many cases, minor kitchen remodels recoup around 80% of their cost, while upscale remodels recover around 60%.
In a typical home a minor remodel can modernize the space without breaking the bank. For larger properties, consider higher-end materials like granite or marble countertops and energy-efficient appliances to add both style and functionality.
And remember: A little dust today can lead to a lot of dollars tomorrow. Or at least that’s what you can tell yourself when you’re standing in a kitchen with no sink.
3. Energy-Efficient Upgrades
Today’s buyers place a premium on homes with energy-saving features. Consider installing double-paned windows, enhanced insulation, and even solar panels, which not only reduce utility bills but also increase property value. Energy-efficient windows alone can yield a return of 70-80%. Plus, energy-efficient homes tend to sell faster, as buyers look for long-term savings on energy costs.
4. Upgrade Parking Spaces and Garages
In areas with limited street parking, such as urban neighborhoods, adding a garage or expanding driveway space can significantly boost home appeal. A property with an attached two-car garage is especially attractive, providing security and convenience for homeowners and enhancing resale value.
- ROI Tip: For a two-car garage, homeowners might recoup around 60% of their investment. Ensure that any garage upgrades meet local codes and maintain aesthetic harmony with the rest of the property.
5. Landscape and Curb Appeal
First impressions matter, and outdoor spaces are the first thing potential buyers see. Consider adding plants, a new lawn, or even a simple patio. Not only does landscaping boost curb appeal, but it can also increase property value by up to 20%.
- ROI Tip: Focus on easy-to-maintain greenery and choose drought-resistant plants in dry regions to keep upkeep low and water usage efficient.
6. Tracking Your Renovation Impact with Property Assessments
After renovations, your home’s assessed value will likely increase. Knowing the assessed land and improvement values will give insight into how much of the new value comes from your upgrades. This distinction can help with tax planning and identifying whether to appeal the assessed value if it’s significantly high.
With Property Focus’s monitoring functionality, homeowners can easily stay updated on any changes to their property’s records — all without manually checking reports. After completing renovations, monitoring keeps you informed on the real impact of your upgrades, as notifications alert you to shifts in assessed land and improvement values. This data is essential for understanding how additions like extra bedrooms or energy-efficient improvements affect overall property worth. Additionally, monitoring any changes in tax assessments provides a timely opportunity to review and potentially appeal increases, ensuring you’re prepared for future financial decisions like refinancing or selling based on accurate, up-to-date property and neighborhood insights.
Final Thought: Plan for ROI with the Right Renovations
Choosing renovations that combine modern aesthetics, functionality, and efficiency is a winning formula for adding value. Always consult with a real estate professional to help gauge which renovations make sense for your market and budget, ensuring that every upgrade brings long-term benefits.
