The Best Home Renovations for the Maximum ROI
Investing in home remodeling projects can not only enhance the comfort and functionality of your living space, but also increase the value of your property. However, it's crucial to know which projects provide the best return on investment (ROI) to make the most of your resources. Today, we'll explore the ROI for various types of home remodeling projects, including kitchen, bathroom, full home, partial, exterior, and backyard or front yard remodels.
Kitchen Remodels
I think we all saw this one coming and it’s no surprise why. A kitchen remodel is often considered the best investment for homeowners, as it can significantly impact your home's overall appeal and value. According to 2023 data in Southern California, a minor mid range kitchen remodel could yield an average ROI of 88.4%, while a major upscale kitchen remodel could have a much lower return at around 32%. Keep in mind that when you bring customized and exoictic pieces into your home, the cost can rise exponentially, but you may not recoup that full cost in a resale. Prioritizing functional improvements, such as updated appliances, countertops, and cabinets, as well as ensuring a modern and cohesive design, will contribute to a higher ROI.
Although that average upscale remodel shows a lower return, it always depends on location and the neighborhood. If the average home in your neighborhood cost $1,000,000 and you spent $10,000 on a remodel using the cheapest materials possible, you could be doing more harm than good. The opposite is true, if you own a condo that is comped $350,000 and spend $120,000 of the luxury kitchen remodel of your dreams, you may not recoup that investment. Our team is here to guide you through the best finishes, appliances and products for your kitchen to make it a showstopper, but also give you back the best returns possible.
Kitchen Reno ROI (%)
Bathroom Remodel
Bathroom remodels are another popular choice for homeowners, as they can provide an excellent return on investment. A mid range bathroom remodel can offer an average ROI of 67% up from 60% in 2021, while an upscale bathroom remodel can yield around 45.1%. Similarly to kitchen remodels, in order to maximize your ROI, focus on updating fixtures, improving lighting, adding storage, and incorporating modern design elements that make the space feel fresh and inviting.
A note here, modern design elements don’t necessarily mean using only materials seen in a modern style home. You can have a traditional, mid century, rustic, mediterranean or any style home, but using modern layouts, technology and features is always important.
Full Home Remodels
A full home remodel involves updating and renovating the entire house. While this type of project can be costly and time-consuming, it can also result in a considerable ROI. The exact return will depend on the quality of the renovations, the local real estate market, and the specific improvements made. Generally, full home remodels can yield an ROI of 50-75%, but under some circumstances can result in returns of 90-120% while also offering the advantage of creating a cohesive design and improving the overall functionality of your living space.
While whole home remodels focus on a broad range of spaces, partial remodels focus on specific areas of the home, such as bedrooms, living rooms, or basements. These projects can be more budget-friendly and still provide a significant ROI. For instance, a basement or a room off a garage can offer an average ROI of 70.3%. When undertaking a partial remodel, prioritize improvements that increase the home's functionality and appeal to potential buyers, such as updated flooring, lighting, and modern design elements.
Exterior Remodels
Curb appeal plays a significant role in a home's value, making exterior remodels a wise investment. Projects such as siding replacement, window upgrades, and new entry doors can yield ROIs of 68.3%, 68.6%, and 65%, respectively. Landscaping improvements, fresh paint, and updated outdoor lighting can also enhance your home's exterior and boost its overall value.
Investing in outdoor living spaces, such as patios, decks, and outdoor kitchens, can provide a substantial ROI, often between 60-80%. Front yard remodels, including landscaping, walkways, and porches, can also improve your home's curb appeal and value. To maximize your ROI, focus on creating functional, low-maintenance, and visually appealing outdoor spaces that cater to the preferences of potential buyers in your area.
