Five Renovations That You Think Provide Positive ROI

 

Have you thought about renovating your home, but don't know if it's the right decision?

 

We are all for renovations on a personal level, but at the same time when it comes to making the right financial decision sometimes you need to think twice about renovating.

 

We are breaking down the top five renovations that homeowners think will lead to a positive ROI.

 

The first renovation on our list is of course going to be the kitchen. This is typically one of the go-to renovations that homeowners start to do when increasing the value of their home.

 

Having a renovated kitchen will definitely make your home easier to sell, but at the same time, you most likely aren't going to recoup what you spend on the project.

 

According to the Remodeling 2022 Cost Vs. Value, the average kitchen remodel has an estimated 71% ROI. I don't think you are going to be able to find better numbers than that.

 

Now I always tell my clients not to over renovate when starting to work on the kitchen or any room for that matter. 

 

Remember a little goes a long way.

 

For example, sometimes you don't even need to get new cabinets, you can just reface the cabinets or paint them.

 

You would be surprised at some of the before and after pictures with these changes.

 

Another room in the house that may come as a surprise is the bathroom.

 

A bathroom renovation might also seem easier and cheaper to tackle, but the national bathroom ROI is going to be even less than a kitchen remodel. You are typically seeing average ROI returns of under 60%. Sometimes you can see higher returns, but it's rarely going to be over 100%.

 

Like I keep saying remember not to over renovate!

 

Sometimes little changes go a long way.

 

Now I know this one doesn't always apply to everyone, but if it does we want to break down what you can expect on your return on your investment.

 

 We love seeing buyers' faces light up when a home has a finished basement, but we also don't love it when it comes at a price to the seller.

 

Finished basements do make a big difference to most buyers on the market and because of that they are definitely willing to pay, but they typically aren't willing to pay enough.

 

 Average basement renovations are going to be about 70 to 75%, so let's say you spent $10,000 on a renovation you can expect to get $7,000 to $7,500 back.

 

Although those numbers aren't bad, it's definitely not a positive ROI.

 

Adding a patio or deck can be a great addition for personal use if you can even do it with your property, but when it comes to getting a return it's not so great.

 

Now this type of add-on (it's not exactly a renovation, but we'll go with it) provides about a 66% ROI.

 

Not bad if you can enjoy the outdoor space yourself as well, but if you are doing this just for return purposes you need to think again.

 

Now you might be thinking how can you not get a positive ROI from this?

 

The average ROI for adding a bedroom is anywhere between 53% to 75%.

 

So unless you need another bedroom in your home there is no need to add one from an investment standpoint.

 

You might have noticed a trend in this article.

 

All of these different types of renovations will have at least a 50% ROI, but not a single one of them will give you a 100% ROI.

 

So do we recommend renovating your home to improve the resale value?

 

Almost always the answer is going to be no, which might actually surprise you.

 

Most homeowners end up over-renovating and spending too much to the point where it's impossible for them to make any money off the renovation.

 

If you are able to do renovations well under market price then you could make money off it, but if you can't you are better of selling the property in the condition it's already in and adjusting the price accordingly.