The Harvard Joint Center for Housing Studies projects that home renovation and remodeling projects will rise to $337 billion in the second half of 2021 up from $332 in the last quarter of 2020. Unfortunately, the average rate of return on popular home renovation projects has come down to 66.5% from the previous year’s return of 68.6%. Despite this, it appears that as the pandemic lingers on, homeowners prefer to upgrade and remodel their existing abodes rather than venture out and risk the dull real estate market.
Some of the most popular home renovation projects don’t necessarily yield the best rate of return. That is why it is vital to know which upgrades will pay back when the time to sell does come around. Following is a list of the most promising value-adding home renovations based on research conducted by the National Association of Realtors and others.
Upgrade an Unfinished Basement
One thing a vast majority of potential home buyers have in common is the need for more space. Real estate agents quote the desire for extra space has been the most relevant factor for moving for the past several years. This trend is only gaining force with the advent of coronavirus.
Completing an unfinished basement is a big task. Finishing a basement requires a number of permits not to mention installing drywall, flooring and insulation. The project is well worth the effort as Remodelling Magazine estimates that you can recover 75% of the cost incurred.
Add a deck to the backyard
With more people stuck indoors, addition of open-air living quarters is something people embrace with open arms. Outdoor entertainment can be a lot of fun for the whole family. By adding a deck to your house you will not only add value to your property, but create for yourself an area that is relaxing and enjoyable. A space that is ideal for entertaining and spending quality time with the family.
Addition a deck in your backyard can be costly, but there are ways to keep expenses down. The more square footage you construct, the greater the final price. So optimize the size of your construction and build a patio that fits your budget.
Another factor that adds to the final price quickly is the additional bells and whistles. Obviously going with a built-in grill, seating and flowerpots will only add to the expense. Once again you can control this by picking and choosing what you want to spend on and what you can leave out. By adding a deck to the back of the house, homeowners can recover anywhere between 65 to 90% of their investment according to HGTV by building a deck.
Create an Energy-Efficient House
If your house is old, chances are that it is short on even the basic insulation. If it is relatively newer, there is room for improvement as new energy-efficient devices are being introduced at an increasing rate. An energy-efficient building has more appeal for a potential buyer and will save you utility bills as long as you reside there. Carrying out simple upgrades like adding insulation in the attic, or increasing the thickness of existing one can provide big rewards.
According to estimates made by the U.S Department of Energy, on average the collective leaks in a home correspond to a three-foot by three-foot cavity in the wall. All those small crevices allow your hard-earned dollars to flow out. They can easily be pinpointed by seeking out the draft-ridden areas. Typically such areas are located around windows or doors, light switches and sockets, and the basement.
Sealing such gaps does not even require any special expertise. You can easily turn it into do-it-yourself home renovation projects, purchase a good quality sealant or adhesive sealing strip at any home improvement store near you and seal away.
Energy-efficient windows, appliances, lighting can also save big time and help leave a smaller carbon footprint. Replacing one traditional light bulb with a CFL light saves you 75% energy over the course of its life. Programmable thermostats are also big energy savers. By some estimates, a typical homeowner can save $180 annually in cooling and heating expenses.
Another item that really cuts energy costs is the water heater. If your water consumption is around 40 gallons daily, then a tank-less heater can save 24 to 34% on heating water. Savings drop to 8 to 14% with greater consumption. Detectors for water leakage, security cameras, and smart locks all provide convenience and don’t require major home renovations. All these small upgrades actually add value to your property.
The kitchen is the center of the household. And it is one of the key areas potential buyers focus on when looking to purchase a home. It is very easy to go overboard with kitchen remodeling projects. Who doesn’t love the top-quality Tuscan tiles, fitted gourmet coffee machine or a fancy microwave? It is one thing if you reside in a chic neighborhood, where a “gourmet” is the norm; otherwise, maintain a balance with the neighborhood. Excessive customization can be a deterrent; it is paramount to keep functionality a priority and not extravagance.
If you plan to live in your house for a few years, it is best to invest in quality equipment that is serviceable. Whether this is flooring, cabinetry, or appliances, ease of maintenance is a priority with most people. Also, keep in mind that minor remodeling projects in the kitchen recover more compared to major upgrades.
Adding a kitchen island is a good way to modernize your kitchen, but it is one of the more expensive kitchen projects. It can be a worthwhile investment, but keep in mind that adding one can cut down on your kitchen space. It may be a good idea to fabricate a temporary cheap cardboard one just to see how it works for you, before making the big investment. Updating the cabinet fronts with something stylish can also create a big impact without breaking the bank.
Changing the backsplash is another inexpensive way to give the kitchen a stylish look without being too heavy on the pocket. Strategically placed backsplash racks add handy storage space yet maintain style. Pull-down racks provide instantaneous access to cooking utensils without the muddle. Installing the readymade racks is quick and frees up counter space. According to a remodeling impact report put out by National Association of the Remodelling Industry, kitchen upgrades can help to recoup 52% of the investment.
After kitchen, bathrooms are the second major selling point for home buyers. The number of bathrooms in a house is one of the first things most buyers look at when house searching.
Adding bath and shower area
For a house with only one and a half bath, adding a shower area to the half bathroom can instantly enhance the value of the property. Adding a new half bath near the living area for visitors has the same effect. A new half bath requires 18 square feet of space. A closet that may not be of much use near a living area or empty space under the stairs can be ideal spots for a new half bath. According to HGTV addition of a new bathroom recoups 80 to 130% of the cost incurred on building it.
The biggest factor in increasing the cost of bathroom renovations is when the plumbing pipes have to be moved. If you are constructing a new bathroom, stick to keeping fixtures to one wall. In remodeling, try not to touch the load-bearing walls, as this may mean having to redirect plumbing or electrical routes.
Upgrade intelligent faucets
Smaller upgrades can include faucets that turn on automatically by waving the hand. The minimal contact with fixtures cuts down on spreading of germs. Adding a flush sensor further reduces direct contact and is fairly inexpensive if a DIY kit is used. Same goes for switching the standard soap dispenser with one that is motion-activated.
Install bidet seat to the toilet
The installation of a bidet seat is a new concept in the U.S.. It’s spiked by 80% when toilet paper became increasingly harder to find. Hand-sprayers and bidet seats are the latest trends in bathroom upgrades. Washing instead of wiping offers greater hygiene. It cuts down on toilet paper consumption which gives the environment and your pocketbook a break. The best part is that they attach to existing water pipes and can be installed very quickly.
If you pick and choose your home renovation projects carefully, you can add significant value to your house or just enjoy them yourself. If you are handy with tools, you can further cut down on costs.