As a homeowner, you may be considering a renovation project for your home. You may want to update your kitchen or bathroom, add a new room, or expand your living space. While the benefits of a renovation project may be clear, one question on your mind is how much value a renovation can add to your home. In this blog, we will explore this question in more detail.

The type of renovation project matters

The amount of value a renovation project can add to your home depends on the type of project. According to Remodeling Magazine’s 2021 Cost vs. Value report, the average return on investment (ROI) for a minor kitchen remodel is 72.2%, while significant kitchen remodels have an average ROI of 62.1%. According to the same report, adding a deck to your home can have an average ROI of 66.8%. The National Association of Realtors reports that adding a bathroom to your home can have an average ROI of 50% while adding a bedroom can have an average ROI of 30%.

Location plays a role

The location of your home is also a factor in determining how much value a renovation can add. Homes in desirable neighbourhoods or areas with high demand for housing may see a higher increase in value after a renovation. It’s a good idea to speak to a professional residential construction firm to figure out the type of renovation that will guarantee the highest return in your neighbourhood.

The condition of your home matters

The condition of your home before the renovation also plays a role. A renovation can significantly increase its value if your home is outdated or needs repair. On the other hand, if your home is already in good condition, a renovation may not provide a significant return on investment. It is always a good idea to reference renovated homes sold in your area within the past year to get an idea of the prices homes are selling at in certain conditions.

Energy-efficient upgrades can add value

Energy-efficient upgrades can add value to your home, such as adding insulation, replacing an old furnace, or installing new windows. The Energy Star program reports that adding insulation to your attic can save up to 15% on heating and cooling costs. These upgrades can also help reduce your energy bills, making your home more attractive to potential buyers. Additionally, the federal government has rebate programs for renovations that improve your home’s energy efficiency. Taking advantage of these rebates is excellent if you plan to renovate your home!

Focus on popular trends

Renovations focusing on popular design trends, such as an open floor plan or a modern kitchen, can add value to your home. According to a survey by the National Association of Home Builders, the most popular home renovation projects in 2021 were kitchen and bathroom remodels, outdoor living spaces, and home offices. A study by Zillow found that homes with features like a farmhouse sink, subway tile, or shaker cabinets sold for an average of 13% more than homes without these features.

Consider the cost of the renovation

It’s essential to consider the renovation project’s cost when determining how much value it can add to your home. If the project cost is high, the return on investment may be lower. It’s also important to remember that the cost of a renovation project may be affected by factors such as the size and condition of your home, the materials used, and the project’s complexity. Working with a professional home builder can help you better understand the cost of your renovation project and the potential return on investment.

Hire a professional

Working with a professional home builder can help ensure your renovation project is done correctly and meets local building codes. This can increase the value of your home, as potential buyers may be more likely to make an offer on a home that has been professionally renovated. The 2021 Remodeling Impact Report by the National Association of Realtors found that 66% of homeowners who completed a renovation project felt a sense of accomplishment, while 74% reported feeling happier in their homes after the project was completed. Avantis Builds offers free, no-obligation consultations on all projects. Feel free to give us a call anytime to discuss your upcoming project!

Don’t over-renovate

While a renovation can add value to your home, it’s crucial not to over-renovate. Spending too much on a renovation project can decrease the return on investment. It’s essential to balance the renovation cost and the potential increase in your home’s value to maximize your return on investment.

In conclusion, a renovation project can add value to your home, but the amount of value it can add depends on several factors. The type of project, location, condition of your home, energy-efficient upgrades, popular design trends, cost of the renovation, working with a professional, and not over-renovating are all factors to consider when deciding whether to undertake a renovation project. By carefully considering these factors, you can determine whether a renovation is right for you and your home.