Home renovation projects are not all created equal when it comes to your end resale value. Learn more about which projects pay off and which may set you back.
Renovating a home is always going to be an exciting prospect for an owner who wants to make a positive change in their household. However, there are some projects that offer better returns than others when it comes to resale value. While there are no guarantees as to how much your project will pay off, there are averages a homeowner can use to prioritize their remodeling plans. The average cost of a home remodel is close to 65%, but many projects net much less.
According to many studies, bathroom additions tend to recoup around 56% of the cost to install. While there's no doubt an extra bathroom will make the home more attractive, the actual addition of a basic bathroom can easily run a homeowner well over $40,000 to complete. If a person is opting for a luxury bathroom, it can roughly double the costs.
Depending on the neighborhood in which a person lives, it's difficult to raise the total home price by an additional $40,000 – $80,000. If the home absolutely needs a new bathroom, consider it an investment in the quality of life of the residents rather than a way to increase resale value.
Luxury Bathroom Renovations
Renovating a bathroom to include a new Jacuzzi tub and deep-dish round sink typically nets about 57% return on resale value. Because a luxury remodel can cost more than the addition of adding an entire bathroom to the home, homeowners are encouraged to downscale their efforts when it comes to their current bathrooms.
A minor remodel can heavily boost the return on investment, while still updating the look of the bathroom and improving the experience of those who use it. Changing out the hardware, replacing the lighting, and painting the walls or retiling the floors are all options that won't break the bank.
Adding a deck can really open a home buyer's eyes to all the fun that can be had in their own backyard outdoor space. However, the excitement a deck generates doesn't translate to a solid ROI on the original costs. On average, and according to most studies, decks average about $38,000 to install and return close to 58% upon resale (presuming the deck properly cared for by homeowners).
Homeowners can considerably cut down on the cost of installation by doing it themselves, but this labor-intensive option is not always practical for busy people. Consider adding a water element to the backyard or planting a vegetable garden as a way to make the backyard more attractive without adding a deck. Be sure to stage the backyard when selling for an even better effect.
Master Suite Addition
A master suite can be the focal point in a West Calgary home—one that home buyers remember among a sea of other potential candidates. But considering the average price tag of well over $200,000 to install a master suite, it may not be practical when homeowners consider the 57% average returns. Unless a homeowner is located in a neighborhood that has drastically increased in value, it's extremely unlikely that adding a master suite will be worth the effort.
The rule of thumb for most homeowners is to remember that larger, more expensive projects won't net them higher returns. Those looking to maximize the resale value of their home should look to smaller projects with more concrete value. Those who want to complete these renovations regardless of their ROI should view them as a way to increase the comfort and convenience while they're still living in the home.