If you’re considering selling your home and want to generate a profit from the sale, then a well-considered renovation is often the way to go. The right renovation will add value to your home and give you a healthy return on your investment.
It’s good to remember buyer psychology here. Most buyers prefer a home that is up-to-date and ready to move into. They will pay more for a home that has been upgraded because they won’t have to put in the time and costly effort it takes to renovate a house.
However, some renovations are more sought-after than others. And a few might even make your home difficult to sell. We asked experienced real estate experts to identify which reno projects will add value to your home in 2024.
Renovation projects that will add value to your home
Not all renovation projects are created equal. While some projects will undoubtedly never go out of style (who doesn’t love a state-of-the-art kitchen or bathroom?), other renovation trends may be fleeting.
Kitchens, unsurprisingly, top our list of renovation projects that will add value to your home. Buyers’ yearning for a great kitchen hasn’t gone anywhere, and they’re prepared to pay a premium for a home with a newly renovated kitchen.
The golden rule with remodeling a kitchen is to go for the best quality renovation you can afford. More really is more with kitchens. Fran Lisner of Daniel Gale Sotheby’s gives a taste of what the perfect kitchen remodel might include: ‘‘Imagine sleek countertops, state-of-the-art appliances, and exquisite cabinetry that will make your heart skip a beat.’’
Get it right, and you can get a whopping 100% return on your investment with this type of renovation. Moreover, neglecting the kitchen before a sale can cost you buyers. Jen Turano, a licensed realtor at Compass in Greenwich, CT, tells us that she works ‘with several buyers who are reluctant to see a home if the kitchen appears to need a major transformation.’
If you don’t have the budget for a gut renovation, don’t worry. Often, making small but high-quality improvements can make a difference, and it’s even possible to update a kitchen without buying anything new. Turano recommends ‘painting the cabinets a clean, neutral color to brighten the room, swapping countertops with a more desirable material, replacing dated hardware for new, on-trend pieces, and updating old appliances.’
Fran is a licensed real estate salesperson at Daniel Gale Sotheby’s International Reality. She is a well-known top producer in the competitive Gold Coast Long Island Real Estate market.
Outdoor living spaces
The trend for a comfortable and well-maintained backyard or outdoor space continues. Far from a temporary pandemic-era want, a great outdoor space has firmly taken a top spot on buyers’ lists of priorities for a new home. Fran Lisner tells us beautiful outdoor spaces are set to be in high demand this year: ‘In 2024, outdoor renovations are expected to be in high demand, offering a potential 100% return on investment.’
So, what do buyers look for in an outdoor renovation? Mainly a combination of an easy-to-maintain green space and a paved patio or deck perfect for relaxing and cooking. Lisner suggests you ‘picture yourself lounging on a stunning patio, surrounded by lush greenery and a perfectly manicured garden’ to imagine the kind of upgrade that will add value to your home.
It’s not necessary to create an elaborate planting scheme. This can even be detrimental (we’ll say more about this in a bit). The key is not to overthink your outdoor space or garden scheme. Hiring a great landscape designer or gardener and explaining that you want an easy-maintenance design should do the trick. And if you’re proficient at DIY projects, you could even renovate your outdoor area yourself.
The basement is one of those spaces in the house that is often undeservedly neglected. Yet they are spacious, and many like using them as home offices, playrooms for the kids, or even as additional living areas. The truth is, though, that most people aren’t prepared to undertake a basement renovation project themselves. So, you have an opportunity to wow a buyer with a finished basement.
A finished basement is a basement that has been fitted with an electrical supply, a fully finished floor (carpeted or hard), lighting, and finished walls. It’s a space that is ready to use and has been seamlessly integrated with the rest of your home.
Fran Lisner highly recommends exploring a basement renovation as part of your value-adding plan. She explains: ‘A finished basement can serve as a cool hangout area, providing an informal living space that can be enjoyed all year round, regardless of the weather. This additional level of living adds value to your home and offers a unique selling point.’
Luxury bathrooms are another safe-bet value-adding option on our list. With the increasing trends toward spending quality time at home and self-care, spa-style bathrooms remain in high demand and will be for the foreseeable future. As with kitchen renovations, you really get what you pay for with bathroom renovations, so aim for as good an upgrade as you can afford.
Lisner recommends zooming in on ‘Lavish fixtures, elegant finishes, and meticulous attention to detail’. These ‘can take your bathroom renovation to the next level’ – and deliver you a great return on investment. While the average return on investment for a bathroom remodel is around 70%, according to Lisner, ‘well-executed projects have the potential for a 100% return.’
Just be careful not to go overboard with a design that is too unique or too bold. Jen Turano recommends sticking with ‘materials, colors and finishes that are universally appealing. You want the room to resonate with as many people as possible.’
Jen Turano is a licensed real estate agent in Greenwich, CT. Prior to joining Compass, Jen was licensed under a luxury real estate brokerage with offices in multiple locations including New York City, Connecticut, The Hamptons and Palm Beach. There, she was the recipient of numerous industry awards including the 2020 Platinum Circle Award, 2020 Strategy Star and 2017 Rising Star Award.
A well-executed bathroom remodel will recoup most of the bathroom remodel costs, which is pretty good as far as renovation ROIs go. Zillow data shows that a successful bathroom renovation can deliver a $1.71 value increase on every $1 you spend. That’s impressive.
Smaller upgrades throughout the home
If your kitchen and bathroom are already in good shape, you can add value to your home by making smaller improvements and upgrades throughout the home. Diana Rutherford, Realtor with Realty One Group, recommends focusing on fresh interior paint in ‘a very calming, modern color’ and updating the flooring throughout, ‘keeping the flow of the home consistent.’
These two relatively cheaper and shorter renovation projects can make a big difference to the sale value of your home if the major rooms are already in great condition.
Which renovation will add the highest value to your home?
There are no surprises here. It’s still the kitchen, which on average, will give you a 54% ROI in the US. That’s the national average, but this number can approach 100% on the West Coast, while if you live in parts of the Midwest (in Iowa, say), you’ll get less of a return, around 68%.
You should do your research, factor in when you plan on selling, and go from there. If you want to sell in 2024 and live in an area where kitchen renovations don’t have a very high ROI, then you’ll probably just waste money on a renovation.
If you still want to live in your house for a few more years and want to enjoy a modern kitchen, go for it. The value-adding won’t just be about the home sale but also about your own comfort.
How much value will a bathroom renovation add?
A well-executed bathroom remodel can recoup over 70% of the bathroom remodel costs, which is pretty good as far as renovation ROIs go. Again, this number will be higher or lower depending on your area and the quality of the renovation. Zillow data shows that a successful bathroom renovation can deliver a $1.71 value increase on every $1 you spend. That’s impressive.
Which renovations will not add value to your home?
Remember how we said at the beginning that not all renovations are created equal? Well, some will actively harm your chances of selling your home at a good price. That’s usually either because the seller has misunderstood the local market or because the result of the renovation is perceived as high-maintenance or completely unnecessary. The top offenders, according to our experts, are:
1. Highly Specific Customizations
Our experts are in consensus over this one. ‘Customizations that are highly personalized to your taste may not resonate with potential buyers’, warns Fran Lisner of Daniel Gale Sotheby’s. ‘Unique features such as unconventional paint colors, extravagant built-in features, heavy and ornate trim, and moldings, or overly themed rooms may limit your home’s marketability and potential return on investment.’
Another example of excessive customization is transforming a spare bedroom into a space with a very specific purpose. Jen Turano names theater rooms, home gyms, and photography studios as ones to watch out for because ‘buyers may have their own needs and will then have to undo your recent work.’ Of course, if you’ve had a home gym or theater in your home for many years for your own use, there’s no need to get rid of it.
2. Garage conversions
Give this one a miss if you’re renovating purely for value-adding purposes. Fran Lisner cautions homeowners that ‘many buyers value the functionality and convenience of a garage for parking and storage. Removing this space and converting it into living space may limit the appeal of your home and potentially decrease its value.’ If you have a garage, keep it tidy and well-organized and leave it be.
Try not to add misjudged luxury additions to your home. This is one of the most common mistakes home sellers with the budget for upgrades make. Realtor, Diana Rutherford, is very clear about this: ‘Installing extravagant features that exceed your neighborhood’s standard appeal does not provide a significant return on investment.’