What renovations give the best ROI? This is a tough to answer and one that has been written about many times. What’s common in these posts, is for people to spit out a bunch of ideas that increase the home value the most significantly. But, just because it adds the most value to the home doesn’t mean it’s also the best ROI. That said, let’s take a look at the top renovations that will positively impact your ROI.
This is the hands down the easiest and most effective contributor to ROI. Paint is inexpensive (by comparison to other renovations) and can totally transform the look of a home. The best part is, you can use paint everywhere inside the home and often everywhere outside, depending on the exterior. Old siding, old brick, old stucco, and any wood soffits or fascia can all benefit from a coat of paint. Paint can make a massive difference in the curb appeal of the home as well as the entire look and feel inside the home.
The difference between dated flooring and new flooring throughout a home can be staggering. The key to making this a good ROI is getting discount flooring. Places like Home Depot often have discount items regularly. Also, check your local flooring store for discontinued products that they’re trying to sell off at a discount.You can also contact a local installer and ask them if they have anything for a good deal. Often when doing large jobs that require special order flooring, extra materials are ordered to make sure there’s enough. More often than not, there’s a good chunk leftover that ends up sitting in the installers shop taking up valuable space just begging to be part of your new house. All you need to do is ask. Flooring material can be extremely expensive, so you really need to try to find a good deal on it to make it a great ROI.
Kitchen Cabinets. It’s Not What You’re Thinking
When you look at a kitchen, what do you see? Doors, drawers and countertops. So why replace the whole kitchen? If the main framework of the cabinets are in good shape, you can cut the costs dramatically by just refacing them. There are companies out there that will come in and measure all your door and drawer fronts, then custom make new ones to replace them with. If you’re into DIY projects, you can measure your own doors and drawers and order them online and even install them yourself.
There are also endless countertop companies out there who will come in, measure up your kitchen and have your new counter tops ready within a couple weeks.
Quick tip: redo the doors and drawers first before getting the countertop company in to measure up for the new tops. It’s much easier for them to adjust how the countertop is going to sit,rather than having to shave down the tops of the drawers if they happen to be a little snug.
How to Guarantee the Best ROI
In any given area, on any given project, the only way to know for sure that you’re getting the BEST possible ROI is to do the math. Go online and find a comparable home that has the renovations, that you’re considering, already completed. After making sure there are no other major differences between your home and the renovated home (neighborhood, size, number of bedrooms etc.), you’re ready to do the math. (1) subtract the current value of your home from the cost of the renovated home. This will be be the potential gross earning from your renovation(s). (2) then, put together an estimate for the potential cost of the renovation(s). (3) subtract that from the gross potential earning that you just calculated, and that number will be your net profit.
Your current home value: $330,000
Value of home with renovations completed: $340,000
Cost of renovation: $3,500
Total increased value: $10,000 ($340,000- $330,00)
Profit: $6,500 ($10,000- $3,500)
ROI: 186% (profit divided by cost $6,500/$3,500)
The bottom line is that, if you don’t know how much any given renovation will increase your property value, you won’t know your ROI until it’s too late. Start doing some research and see what renovations could be done to give you the best ROI!