Home Renovations That Add Value
An Evidence-Based Approach to Home Remodeling & Home Renovations
If you’ve watched HGTV in recent years, then you’ve probably heard the idea that home remodeling before selling is a good idea. And not only that, but they make it look super easy and profitable.
But if you’ve taken on such a project, you probably know this idea is not entirely accurate. In fact, remodeling your home can be extremely time consuming, stressful, and expensive.
That said, amidst all the false assumptions and heuristics displayed on HGTV, there is a grain of truth. Remodeling your home can add a ton of value and be extremely profitable, but you must be very intentional in your planning and budgeting.
I created this guide to help you determine which projects are worth taking on and which ones are better off foregoing. My hope is that this information makes your remodel as profitable and simple as possible. Enjoy!
Your Home’s Remodel Score
Every home is different, so before we dig into specific projects, we need to score your home. Homes with higher scores benefit more from a remodel than homes with lower scores (more on this to come). For now, just answer the questions below to determine your home’s remodel score.
Okay, now it’s time to determine your home’s remodel score. To do this, simply total your answers to each of the 5 questions. You should get a number between 5 and 25. We’ll use this number throughout the rest of this guide, so make a mental note of it, or write it down here: ________
Note: if your number is less than 10, then you probably don’t need to remodel your home. Basic cleaning and staging may be all you need. Feel free to read on for fun, or check my free home staging guide for more info on prepping your home for sale.
Next, we’re going to look at a series of projects that will give you the most bang for your buck in Central Ohio:
In each section, I’ll provide details on how I recommend tackling this project, an estimated ROI, an estimated cost, and a Remodel Score Threshold.
For purposes of this guide, cost estimates are based on a traditional 3-4 bedroom single-family home in Central Ohio.
The ROI is based on the estimated value the project will add to your home versus the estimated cost. For instance, if a project costs $5,000 and adds $7,500 in value, then the ROI will be 50%.
Lastly, the Remodel Score Threshold is a general guideline as to whether a particular project is worth doing in your home. If your home exceeds the threshold, then I generally recommend proceeding with project.
Since the olden days of the 1800’s kitchens have evolved from a small, secluded rooms to the focal point of the modern American home. There’s no doubt that renovating your kitchen can completely transform your home, but it can also be expensive. Let’s look at the average costs involved in a kitchen remodel:
- New Cabinets: $8,000
- New Appliances: $2,500
- Granite Countertops: $3,000
- Flooring: $3,000
- Light Fixtures & Electric Work: $1,000
- Backsplash: $1,000
- Painting: $1,500
- Moving Walls: $4,000
- Miscellaneous: $1,000
- TOTAL COST: $25,000
While $25,000 may sound like a lot, it may not all be necessary. For example, if you already have an open, modern floorplan, you won’t have to spend $4,000 to move walls. Or perhaps you just purchased new stainless-steel appliances. Review this list of expenses, and determine what, if anything, you would need to do to get your kitchen it tip-top shape. If the total cost (in thousands) is less than home’s remodel score, then it’s probably worthwhile redoing your kitchen. For example, if your remodel score is 21 and the estimated kitchen cost is $15,000, then you should do it (21 > 15). If the numbers are close, you may want to consider getting some firm estimates from a contractor to see which option is best for your home.
Estimated ROI: 25%
Estimated Cost: $20,000-25,000
Remodel Score Threshold: see above
Like a kitchen remodel, updating your bathrooms can make a huge difference in your home’s value, but it can also be expensive. Let’s explore the costs involved in updating your standard bathroom (single-sink, toilet, and bath-shower combo).
- Tile Floors: $2,000
- Resurface tub: $500
- Tile Shower Walls: $2,000
- New Toilet: $300
- New Vanity/Sink: $500
- Plumbing Work: $500
- Light Fixtures: $300
- Miscellaneous: $500
- TOTAL COST: $6,600
While $6,600 may not seem like much in the grand scheme of things, consider that the typical home has 3-4 bathrooms. And unfortunately, with bathrooms, it’s an all or nothing approach. You’re better off redoing all of them, or none of them. We’ve often heard that a chain is only as strong as its weakest link. Likewise, a home is only as good as its weakest bathroom.
Estimated ROI: 30%
Estimated Cost: $6,000-20,000
Remodel Score Threshold: 17
Helpful Hint: you can save a ton of money on a bathroom remodel by purchasing the supplies yourself and hiring independent plumbers and tilers. Menard’s has great prices on countertops, tiles, and more.
Landscaping is a tremendous way to increase your home’s value. Not only is it relatively cheap and easy, but it also offers a great return on investment. A study by RealEstate.com suggests that landscaping and hardscaping can deliver a return on investment as high as 150 percent.
So, what’s all involved in a landscaping project? Obviously, you can go all-out and add an outdoor living room, epic paver patio, and more, but that’s probably not necessary. In fact, it’s best to keep landscaping simple. If you’re a hard worker and have a free weekend, you can probably do most of this stuff yourself. Here’s a list of what landscaping you should be doing:
- Edge around the driveway, sidewalk, and all flower beds
- Remove all weeds and dead plants
- Trim and re-shape overgrown bushes and trees
- Re-mulch all beds and around trees
- Plant flowers in front beds
Estimated ROI: 50%
Estimated Cost: $3,000
Remodel Score Threshold: 8
Helpful Hint: It’s best to plant annuals versus perennials when selling your home. While they don’t come back each year, they tend to be cheaper, more colorful, and have a longer season.
Room consolidation is when you tear down a wall to make a room larger and more functional. This doesn’t work on every house, but if you have the right floorplan, it can really add a ton of value. This typically works best in old homes with small rooms and obsolete floorplans. Here are a few examples of room consolidation at its finest:
- Combine a kitchen with a dining room to make an epic eat-in kitchen
- Combine a 5th bedroom with a master bedroom to make a luxury master suite
- Combine a small family room and a formal living room into a large great room
- Combine a small laundry room with a den to make a large laundry/mudroom with locker space for the kids
When it comes to room consolidation, get creative in order to optimize space. Many of the rooms mentioned above have become antiquated in recent years. How often do you really use a formal dining room? Have laptop computers made dens obsolete? If you have unused space like this, then seriously consider optimizing your home. Again, this won’t work in every home, but if you have the right floorplan, a room consolidation can add a ton of value.
Estimated ROI: 75%
Estimated Cost: $10,000-20,000
Remodel Score Threshold: 20
There’s something about a new home that just feels fresh. Perhaps it’s the new home smell, or maybe it’s the look and feel of clean carpet. The bottom line is, new carpet is one of the primary home upgrades that help’s restore “newness” to an old home. It’s one of the intangibles that can really set you apart from the competition.
In addition, carpet is somewhat disposable. Compared to other things in your house, it has a short useful life; just 5-10 years. Chances are, if you haven’t replaced your carpet recently, the project is overdue – especially if you have kids or pets. Old carpet collects dirt and grime, and tends to smell bad over time. While you, as a homeowner, may not notice this, it can be blatantly obvious to prospective homebuyers.
Here are a few guidelines to go by when selecting new carpet:
- Stick to neutral colors, such as light gray or beige
- Pick a multi-colored carpet with different shades of gray or beige to help conceal dirt and dust
- Textured carpet is in style now (see image below as an example)
- Find the best-looking carpet for the lowest price; remember you’re selling your home, so aestehtics are more important than functionaily
Estimated ROI: 20%
Estimated Cost: $4-6 per square foot
Remodel Score Threshold: 16
Helpful Hint: If possible, it’s best to replace all carpet at once, versus doing it piecemeal. This prevents the checkerboard pattern that you see in older homes, with different colored carpet in each room. Even the slightest difference in color between two room is difficult to conceal. You’ll also find that many carpet installers offer bulk discounts if you do the entire home at once.
Painting, like landscaping, is one of the cheapest ways to increase your home’s value, especially if you do it yourself. For just a few hundred dollars, you can repaint your entire home’s interior. While taping corners, priming walls, and moving furniture can be a bit of a hassle, it’s definitely worth it. You can also hire a painter to do it for you!
Here are a few key questions to ask yourself to determine if you should repaint your home.
- Were your walls repainted in the last 5 years?
- Are your walls primarily light, neutral colors (gray, white, light beige)?
- Are your walls free of scratches, marks, and dents?
- Does your home have a consistent color pallet throughout?
If you answered no to most of these questions, then repainting is probably a good idea. That said, you don’t necesarilly have to repaint every room in the house. Start by looking at the problem areas (bright purple kids room, scuffed-up basement walls, etc.) and work your way up from there.
Estimated ROI: 50% (500% DIY)
Estimated Cost: $3,000 ($300 DIY)
Remodel Score Threshold: 12
Helpful Hint: In addition to repainting your walls, consider repainting your trim, doors, and cabinets. This especially rings true for old homes with dark stain and pickled woodwork. Painting trim and cabinets is a great way to brighten and modernize your home.
New fixtures include door knobs, kitchen cabinet hardware, and light fixtures. Long gone are the days of standard brass fixtures. With the advent of sites like Etsy, Pinterest, and Amazon, there are all sorts of unique fixtures out there to add a little flare to your home. And luckily for you, these fixtures are usually pretty inexpensive.