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Homeowners may have several reasons to renovate their homes and even more remodeling projects to choose from to bring a home up to date. However, some projects will allow you to make better use of your time while bringing in a higher ROI than others.
There are plenty of questions to ask yourself when renovating your home. Should you do it yourself or hire an expert? How much should you spend? Exact what projects should you consider?
Here are some of the most common reasons for home renovations.
Styles change over time, from home decor and finishes to fashions and color trends. If your home is looking a little dated, it could be time for a facelift to give it a fresh new look.
Maybe you need more living space to accommodate a growing family, or perhaps you want to install a deck or patio so you and your family can properly enjoy the outdoors.
Repairs are often required, whether it’s to fix a component or system that has broken down or to rectify a safety issue. A renovation can help fix these problems and ensure you’re providing a safe and comfortable place for you and your family to live.
If you’re planning to sell your home in the near future, and it needs a little work, fixing issues can get your house sale-ready. Buyers typically want a move-in ready home, and by giving them what they want, you may be able to command a higher sale price. Just make sure that any renovations you make reflect what buyers are looking for, and are not so expensive that you’ll barely recoup any of the money you spend on the project when you sell.
Whether you’re planning to stay put in your home or are thinking of selling, the key is to choose renovation projects that have the highest ROI. Here’s where to get the most bang for your buck.
You’ll notice that in most cases you don’t get a 100% return (with one notable exception), but renovation elevates the entire home and can have indirect financial benefits, like selling fast and reducing the amount of time on market (reducing the number of mortgage payments you have to make on it if you still carry a loan balance.)
While there are many renovation projects to consider that will provide a decent return on your investment, others could cost you a lot more than you’ll ever recoup. If you plan to sell, don’t waste your money on these projects.
Lighting is an important component of a home in terms of esthetics and functionality, but you can also go a bit overboard with these fixtures. Don’t go with anything that’s oversized or overly ornate. Not only will it cost you more, but it might not be something that most buyers will appreciate.
Kitchens are seen as the focal point of a home and can definitely be a selling point. For this reason, you may want to put a little more of your money into this space when it comes time to update your home. That said, you don’t want to spend too much money and effort bringing this space up-to-date.
Completely gutting a kitchen — particularly for the purpose of selling — can be a mistake if you’re looking to recoup as much money as you can. Instead, try to keep the cabinets intact, and just focus on replacing the counters, refacing the cabinets and installing new appliances.
It can be easy to overdo it with bathroom renovations, but this small space can be big in expense when it comes time to remodel. Steer clear of high-end tubs, highly customized finishes, and unique features that may not impress buyers, despite the cost to install them.
The number of bedrooms in a home plays a key role in its market value. For instance, a home with three bedrooms will often be valued higher than a home with just two. If you’re not using one of your home’s bedrooms for its original purpose, you may want to transform it into a home office, den, gym, crafts room, or any other type of space you see fit.
However, this might not translate well for prospective buyers who may expect to see an extra bedroom. When you factor in the cost to transform this space, you’ll lose out on both the cost of the renovation and the potential dip in value.
How much can you really increase your home’s value with a renovation?
According to a recent study from Harvard’s Joint Center for Housing Studies, Americans spend billions of dollars every year on home renovations. More specifically, the total spend on home remodeling projects in the US is estimated to be $337 billion over the second half of 2021.
The thing is, not every home renovation project will result in a 100% ROI. In fact, the average recoup amount appears to be decreasing. This year, the average return on common home renovation projects is just over 66%.
That said, an increasing number of home renovation projects are taking place among homeowners. Perhaps the recent health crisis has been a driving force behind many of these projects as many homeowners seek ways to maximize their enjoyment of their home.
Considering the skyrocketing cost of home purchases and super-low inventory levels these days, many homeowners may simply not want to venture out into the world of real estate just yet, and would rather hang on to their existing home. In that case, renovations to plase yourself rather than focus on increasing saleability may be your goal.
How much can you expect to shell out for your home reno?
That depends on a number of factors, including the size and condition of your home, the types of materials and finishes involved, and the extent of the project.
According to HomeAdvisor, the typical range to renovate a home ranges between $18,015 to $76,408. Generally speaking, you’re looking at dishing out anywhere from $10 to $60 per square foot for a remodeling job.
To give you an idea of roughly how much you can expect to spend on a remodeling job, consider the following examples:
Before you start a renovation project, consider the value of your home. You want to make sure that whatever you’re spending on a remodeling job is proportional to your property value. As a general rule of thumb, you shouldn’t spend more than 10% to 15% of the value of your home on any individual room.
How do you determine whether to grab a hammer and crowbar yourself or call in the pros to carry out your remodeling job?
Many homeowners consider taking the DIY approach to home renovation projects to save money. Some jobs may be simple enough for homeowners to tackle them on their own, but others warrant the assistance of a professional. Here are some things to consider before deciding to DIY your home renovation.
Some homeowners are handy enough to take care of smaller remodeling jobs on their own. But more complex jobs may require skilled experts to ensure a job well done. Carefully consider your skills to make sure that you’re fully capable of doing the job safely and effectively.
Many jobs require a building permit before work can begin, along with periodic inspections of the work being done at various intervals. Be sure to get a permit if you need one. Check with your local municipality before you take hammer to nail.
Home renovation projects require a lot more time than you might think. Consider the scope of the job and assess the amount of time you can realistically dedicate to the project before choosing to do it on your own.
You might have the skills necessary to carry out your home renovation project, but do you have all the right tools and equipment? If not, renting or buying them can significantly eat into your allotted renovation funds.
At Sammamish Mortgage, we can help you buy the perfect home, whether it’s newly remodeled or in sore need of renovation. The process starts with getting preapproved for a mortgage, so you can shop available homes on the market with confidence.
Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get pre-approved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.
Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.