Which Home Improvements Add The Most Value
AdvertisementWhich Home Improvements Add The Most Value – Not all home improvements are created equal, so how do you decide whether to remodel your kitchen or add hardwood floors? How much will adding a bedroom or bathroom increase the value of your home?
There are many opinions on the subject, so we took a scientific approach. Our data science team has created a home improvement calculator. With this tool, you can use our data from thousands of recent home sales across twenty major cities to estimate which home improvements would add the most value.
Which Home Improvements Add The Most Value
These are the best renovations, remodeling and home improvement projects that will increase your home’s value, based on data from thousands of recent home sales. We researched 11 projects and ranked them by average value growth by cities that are buying and selling homes. We estimate the average home price in each market.
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The data shows average resale value growth for median-priced homes in all 20 markets currently served. Home price data via the National Association of Realtors (NAR). information updated in August 2019. By linking to home improvement information, you agree to credit and link to this page.
It’s easy to start thinking… “Wow, adding a bedroom can increase the value of my home by 6%, I’m going to add six bedrooms!” Unfortunately, many projects have diminishing returns, meaning the more you add, the more value you get. The chart above shows the average home remodeling project cost in each of our markets.
Ultimately, the amount of value the project will add to your home will depend on the home’s location and current value. We recommend using our home improvement calculator to get a more accurate view of the data, as you can select your city and home value range.
Below is a look at the top 5 home improvement pricing trends that can increase your home’s value. To find out more about the project you are interested in, go ahead:
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According to data from 20 cities, adding an in-ground pool can add 7.3% to the average home value. This is estimated to have increased to about $21,700 when resold.
Adding a pool is a great example of how the value of a project can vary based on price and location.
In southern markets like Tampa, Jacksonville and Austin, the higher the home value, the more value a pool can add. The opposite is true in the West Coast markets of Los Angeles and the Inland Empire, where adding a pool results in slightly less value as home prices increase.
One reason for this trend may be the high cost of living in West Coast markets. The added cost of maintaining a pool can make homes less appealing to buyers on a budget.
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Finishing a basement can increase the average home value by 6.6%, based on our data in 20 cities. This is a dollar increase on the resale value of $21,786. We define a basement finish as 700 square feet of basement space with additional insulation, drywall, lighting, and an emergency escape window or door.
A finished basement can also generate income when rented out to vacationers or a long-term tenant, making it a very attractive amenity for buyers. However, we found its value to be very location specific.
For example, Portland has many historic Victorian and Craftsman homes, which is why the number of tourists hanging out in the basement is so high. In fact, it’s one of the biggest increases among the more affordable homes we’ve seen in our data, adding north of 15%!
Based on our data, all other things being equal, we’ve found that adding a second or third bedroom increases your home’s value the most. Data shows that adding a 3-bedroom can add an average of 6.2% to the average home. That’s an estimated dollar increase of $19,813.
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We define this project as a 2nd or 3rd bedroom addition that increases your home’s above-ground living space by at least 150 square feet. Usually, bedrooms should have a closet, a window and a door.
Adding a third bedroom to a median-priced home in Los Angeles, with a median price increase of more than $50,000, leads to the highest value of all the remodeling projects we studied.
It’s not just a higher price per square foot, because adding living space creates more value in Tucson and Sacramento than in Los Angeles. Adding a bedroom can be especially valuable in denser metros. For example, Los Angeles has the highest number of people per household in the country.
According to the data, adding a full bathroom can increase the average value of a home by an average of 5.7%, which is an increase of about $17,638. and a toilet. We assume that the total square feet will not change.
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Between adding an extra full bath, putting in a half bath for guests, or decorating an existing space, it’s no surprise that adding a full bath generates the most resale value on average.
What may surprise you is that remodeling an existing bathroom creates just as much value as converting it from scratch in many metros.
The difference in added resale value between a complete bathroom conversion and a full bathroom remodel in Minneapolis, for example, is several thousand dollars. However, adding a whole new bathroom in Atlanta can result in more growth than adding a pool or bedroom.
According to Home Improvement, adding living space can add an average of 5.3% to the value of a home. That’s an increase of about $16,628. We define this project as adding 150 square meters of above-ground living space.
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In most of the markets we studied, adding a bedroom creates more value on average than expanding the living space. But in some metros like Austin, Denver and Tucson, a larger living room or additional family room actually creates more value than a bedroom.
In Sacramento—our top city for adding living space—expanding interior space creates the same amount of resale value as adding a bedroom, regardless of the current home value. While it’s true that bedrooms in general add up to a home’s price tag, adding more usable space to a home can be a wise investment, especially for large families.
It’s important to remember that “added value” is not the same as return on investment (ROI). Understanding how much a project can add to your home’s resale value is the first step in determining whether the investment will pay off. The second step is to understand the price.
A kitchen renovation in Phoenix can add up to $23,000, but according to the latest American Housing Survey, the average cost of a kitchen renovation is about $15,000. Local costs will vary, but in the context of ROI, this means the net income from a kitchen remodel in Phoenix is valued at just over $8,000.
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Estimating the added value before the project is carried out makes it easier to negotiate with contractors and understand whether the investment of time and money is worth it.
Even if the project’s ROI is negative—as it can be for more expensive homes—you should also consider how much you’ll enjoy the upgrade and whether you plan to sell soon, weeks or years from now.
While some homeowners want to maximize their ROI, others may prefer to maximize the quality of life in their home. We hope our home improvement calculator will help you do both. Home improvements can make a big difference in the value of your property, but which renovation will give you the most return on investment?
Thinking about starting a home remodeling project? According to a survey of estate agents, adding a two-storey extension can increase the value of your property by 20 per cent.
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Sainsbury’s Bank Home Insurance asked more than 100 estate agents across Britain which have added the most improvements and renovations to the average three-bedroom home, and which have the highest return on investment.
More than half of real estate agents surveyed named kitchen improvements as the number one way to get the biggest return on investment. New bathrooms were cited as the next biggest gain, followed by a loft extension to create extra room.
Other top ways to add value include building a detached bathroom and adding off-street parking, which can increase the value of your home by 13% and 11% respectively.
“Make sure you are protected against any accidents, notify them before the work starts,” he said.
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