Home remodeling projects can be significant investments, especially now with the rising costs of labor and materials. Despite the expense, remodeling can address areas that need repair, update the look of your home, and replace old fixtures in key areas like kitchens and bathrooms. It can also add functionality to unused spaces or even create entirely new rooms through house additions.

These enhancements can greatly improve your daily living experience by adding comfort, convenience, and utility. But how do these changes impact your property’s value? If you’re considering selling your home, you might wonder how much value renovations can add and which ones are most effective. For instance, does adding a room actually increase your home’s value?

These are crucial questions for homeowners preparing to sell. Understanding the potential return on your remodeling investment is key. In this article, we’ll examine whether and how upgrades and renovations can boost your home’s market value. We’ll also suggest specific remodeling projects that can increase your home’s value and highlight those that offer the greatest return on investment.

The Importance of Home Remodeling: A Smart Investment Choice

In recent times, the cost of home remodeling projects has been on the rise, largely due to inflation, supply chain disruptions, and construction delays. Given these factors, homeowners might hesitate before embarking on any remodeling endeavors. Adding to the uncertainty are fluctuations in the housing market and the uptick in interest rates, which can cause concern among homeowners.

It’s worth noting that not every remodeling project guarantees a full return on investment (ROI). Some improvements might even lower the value of your home or end up costing more than the added value they bring, especially if potential buyers perceive them as unattractive, overly personalized, outdated, or not in harmony with the neighborhood’s overall look. The quality of the materials used and the craftsmanship also play a significant role in determining the final value. A poorly executed renovation with subpar materials could potentially harm the value of your property.

However, with careful planning and execution, home remodeling can significantly enhance your home’s value, both in terms of curb appeal and resale price. A visually appealing exterior can draw in potential buyers, while a higher selling price resulting from renovations can ensure a positive return on your remodeling investment when you decide to sell your home.

Which Home Remodeling Projects Add the Most Value?

When preparing to sell your house, focusing on renovations that add value is key. Potential buyers often prefer move-in ready homes and may not want to deal with major renovations. To maximize your return on investment, consider the following:

• Neutral Colors: Opt for neutral colors that appeal to a wide range of tastes.
• Plain Tiles: Choose simple, durable tiles that are easy to maintain.
• Standard Plumbing Fixtures: Install standard, reliable plumbing fixtures.
• Standard Lighting Fixtures: Use standard, energy-efficient lighting fixtures.

Before undertaking major renovations, such as those discussed below, research how they will impact your home’s value.

Adding a Bedroom

• Increase in Value: Depending on your location, adding a bedroom could increase your home’s value by up to $50,000.
• Best Options: Attic bedrooms and master suites tend to offer the highest return on investment.
  • Attic Bedroom: Finished attics can be renovated into bedrooms, but ensure compliance with local laws regarding egress and square footage requirements.
  • Master Suite: Adding a master suite (bedroom with a bathroom) can recoup about 52% of the investment at sale.

Consider the costs involved; on average, adding a bedroom costs around $140 per square foot.

Adding a Bathroom

• Impact on Listing: Additional bathrooms, such as going from a “3/1” to a “3/2,” can significantly improve buyer interest.
• Half Bathrooms: A half bathroom (1.5 baths) can also enhance a listing.
• Value Increase: On average, adding a bathroom can increase home value by 5.7%.

Finishing a Basement

• Square Footage: A finished basement can add usable square footage to your home.
• Value Increase: Finishing a basement can increase home value by 6.6% on average, and up to 10.6% in certain areas like Portland, Oregon.

Kitchen Renovation

• Consideration: Updating an old kitchen can boost your home value by 4.8%, but be mindful of overspending.
• Budgeting: Plan your renovation carefully to avoid exceeding the potential increase in home value.

Adding a Pool

• Market Impact: Pools can be appealing in some markets, but may deter buyers in others due to maintenance costs.
• Value Increase: In certain markets, pools can increase home value by an average of 7.3%.

Adding Another Room

• Bedroom Count: Splitting a room into two can increase the number of bedrooms on the listing, potentially increasing home value.
• Consider Costs: Factor in the costs of additions, which can vary depending on the scope of the project.

Adding Square Footage to Your Home

Expanding your home’s square footage can enhance its value by providing more living space and lowering the buyer’s cost per square foot. On average, increasing above-ground livable square footage can raise your home’s value by 5.3%.

Moreover, adding extra rooms like bedrooms and bathrooms can potentially increase your home’s value even more. These additions not only expand your square footage but also enhance the appeal of your home on real estate listings, further boosting its value.

Before starting any renovation, ensure the potential increase in home value justifies the investment.

Calculating Your Home’s Value After Remodeling

Estimating your home’s value post-remodeling involves using methods similar to those employed by real estate agents when estimating a house’s potential sale price. Since the after-remodel value varies by location, it’s crucial to research your local real estate market for accurate calculations.

To estimate your post-remodeling home value, consider the following factors:

• Comparable sales (comps)
• The range of costs for each proposed remodeling
• The expected return from each remodeling

Calculating Return on Investment for Home Remodeling 

Estimating the ROI for home remodeling is challenging as the final sale price is only known when you receive an offer. However, by calculating the renovation costs and your expected home’s list price, you can get a fairly accurate estimate of your ROI.

There are online calculators available to estimate the ROI of specific home improvements. These calculators provide estimates based on specific markets, offering a more accurate estimate than one based on overall market trends.

Is Home Remodeling Worth It?

Wondering how much home improvements can increase your home’s value? Curious about which upgrades add the most value? These are common questions among homeowners planning a major remodeling project. The answers depend on factors like:

• The stability of the local real estate market
• The specific home improvements you choose
• The potentially high costs involved

As we’ve discussed earlier, certain remodeling projects can significantly boost your home’s value, whether through enhanced curb appeal or a higher selling price. The key to maximizing your return on investment lies in carefully balancing the cost of your remodeling projects against the potential future sale price of your home.

Whether you’re currently remodeling or planning to do so in the future, you’ll want a reliable partner to help you get the best results. HomeCorp stands out as one of the best companies for home remodeling, offering a straightforward platform to ensure you get the best price for your home.