Every home is an investment of some kind. For property flippers, it’s all about a quick and profitable turnaround. For investors, it’s about making the property as attractive as possible to prospective renters. And, finally, for homeowners, it’s about building sustainable, long-term value—the traditional American “nest egg.” While these three types of property owners may have different goals and objectives, the common thread between them is the importance of adding value to the property and, whether now or in the far future, realizing a strong return on investment.
The best way to add both long- and short-term value to a home is through strategic, value-boosting upgrades. In this article, we review several projects that every type of owner—short-term flippers, property managers, and homeowners—can benefit from completing.
In many respects, a kitchen remodel is the quintessential home renovation project. Given the kitchen’s importance to American home life, it’s no surprise that renters and homebuyers have such a love affair with beautiful, upgraded kitchens. According to data from bankrate.com, property owners who invest in a minor kitchen remodel, on average, see a 77.6% ROI. However, it’s certainly possible to beat the curve and get more out of your project. It all comes down to limiting your upfront costs and maximizing the home’s market value.
That 77.6% average is based off the average cost of a kitchen remodel (a little over $23,000). Many owners can complete their remodel for far less. Refacing or repainting existing cabinets, for example, is far less expensive than replacing them altogether. There’s no similar substitute for high-quality stone countertops, but you can—and should—talk to your contractor about any special inventory or discounts you might be able to get. Then there’s the stuff you can complete yourself, like laying flooring, painting walls, and installing lighting fixtures. By limiting your overhead, you’ll squeeze extra value out of your kitchen remodel.
Master Bathroom Remodels
Next to kitchens, bathroom remodels are one of the most popular pre-sale projects. Just as in that space, the average ROI here is solid: 70.1%, according to data from Zillow. But, you don’t have to settle for that. On average, property managers, flippers, and homeowners spend just north of $19,000 on a mid-range master bathroom remodel.
However, bathroom remodels are relatively DIY-friendly projects, so long as you have the time and are not planning on moving walls, pipes, or electrical outlets. Most homeowners are capable of laying their own tile, replacing a toilet, adding new sink fixtures, and putting in a vanity. Doing all this will take a lot of elbow grease, but it also means you avoid thousands in labor costs. Of course, this is well within the wheelhouse of experienced fix-and-flip owners.
These projects should be considered on an as-needed basis. Statistically, a garage door replacement is one of the highest-ROI projects out there (94.5% ROI on average, per Zillow), but doesn’t make much sense for the home unless your existing door is damaged or failing. Context is everything here. Generally speaking, if your home has a major defect, you’ll want to fix that first before moving onto projects purely categorized as “upgrades.” After all, these flaws may hold up the sale (or rental) of the home and, ultimately, even detract from its value.
Consider your home’s cooling and heating systems. If yours are relatively new, regularly maintained, and providing efficient indoor comfort, you can move on to other projects ahead of sale. Conversely, if your HVAC systems are aging (10+ years old), have a track record of performance issues, and are more than likely to get flagged in a home inspection, you’re probably better off pivoting and taking care of them first. Replacing an air conditioner or furnace may not be an exhilarating project, but it qualifies as an essential one that will save you a ton of time and headache down the road.
Samantha Johnson is a remodeling writer for Superior Stone & Cabinet, a cabinet and countertop superstore in sunny Phoenix, Arizona.