Making Smart Choices for Home Renovations
Most homeowners dream of remodeling their homes, but not all upgrades provide a good return on investment (ROI). According to recent data from the Contractor Growth Network, bathroom makeovers top the list of popular home improvement projects, followed closely by kitchen and basement renovations. However, a great return on investment isn’t guaranteed, and a separate report by Zonda Media suggests that homeowners typically get only a 60% ROI on their renovation investments. Let’s explore how to make informed decisions about home renovations, from choosing projects wisely to managing costs and financing.
Maximizing Return on Investment
Contrary to popular belief, the projects that offer the highest resale value are not always lavish kitchen and bathroom remodels. According to Todd Tomalak, Principal of Building Products Research at Zonda, some renovations provide a much better ROI. These include converting to electric HVAC systems, replacing garage doors, adding a stone veneer, or upgrading to a steel front door. Surprisingly, minor kitchen updates, such as painting and updating the backsplash, tend to offer better returns than major kitchen and bathroom renovations.
Financing Your Home Renovation
With home prices soaring and a limited supply of available properties, more people are choosing to improve their current homes instead of moving. However, the cost can be a significant concern. Homeowners planning renovations should carefully consider their financing options. Obtaining a home equity loan or a home equity line of credit is one route, but it’s crucial to factor in interest rates and monthly payments. Ensure that these additional costs align with your budget before embarking on your renovation journey.
Long-Term Considerations
Before diving into a renovation project, ponder how long you plan to stay in your current home and how the renovation will impact your life. According to Tomalak, if you’re not planning to move anytime soon, the focus should shift from viewing renovations as purely investments to enhancing your overall quality of living.
In conclusion, while homeowners are enthusiastic about home renovations, it’s vital to approach them with careful consideration. Choose projects wisely to maximize your ROI, manage costs by obtaining competitive bids and building a financial buffer, and explore financing options that align with your budget. Most importantly, keep your long-term goals in mind to ensure that your renovation enhances your quality of life, regardless of its financial return.
Source:
https://www.nar.realtor/research-and-statistics/research-reports/profile-of-home-staging
https://www.hgtv.com/lifestyle/clean-and-organize/which-home-improvements-pay-off
https://www.realsimple.com/home-organizing/home-improvement/renovations/home-upgrades-payoff
https://realestate.usnews.com/real-estate/articles/home-renovations-that-pay-off-and-that-dont