However, the ROI of a bathroom renovation often follows the same pattern as kitchen renovations. In terms of return on investment, exterior renovations are the ones that rule and have done so for the past 30 years, according to the Remodeling report. In fact, four of the top five jobs with an ROI greater than 100 percent are outdoor improvements. In the case of home improvements, return on investment (ROI) describes how much money you get back when you sell your house.
Only a few projects have an ROI greater than 100%, meaning you earn more than you spend. However, an ROI of less than 100% isn't bad: you can continue to enjoy the improvements in the meantime and then recover part of your investment. According to Remodeling Magazine and the Remodeling Impact Report, new vinyl windows recover more of the initial cost (around 67%) than new wood windows (63 to 66%). Founded in 1976, Bankrate has a long history of helping people to take smart financial decisions.
We have maintained this reputation for more than four decades, demystifying the financial decision-making process and giving people confidence about what steps they should take next. Start by repainting any room with a “strange color combination,” says Timothy Wiedman, a personal finance expert and lover of homes. For example, did you let your 11-year-old daughter paint her room deep pink 10 years ago? If so, that's a good place to start. When looking to add value to your home, invest in the essentials, such as updated HVAC systems, insulation and updated electrical panels.
Incorporating renewable energy elements such as geothermal heating, solar panels and wind energy can attract energy-conscious buyers. In addition, the Inflation Reduction Act contains provisions that could provide discounts on energy-saving home improvements. This is because it adds valuable living space (always an addition to the value of the home) without increasing the space occupied by the home. Often, if your home only has one bathroom and several bedrooms, adding an additional bathroom to the design can add value to your home and provide a 51% return on investment, according to This Old House. Sure, they want to improve their living space, but they often expect that the renovation or extension will also increase the value of their home.
From insulation to electricity, some of the most important improvements that add value to the home aren't always visible. The most immediate benefit you'll get from any home improvement project is the added joy, functionality, and experience of living with the improvements. Other ways to improve the efficiency and value of your home include replacing old, leaking windows, installing energy-efficient appliances, and adding insulation to your home. Even “simple tasks, such as adding a new coat of paint outside, can increase the value of your home,” Lamont says.
And if you opt for a truly exclusive remodel, with state-of-the-art and next-generation appliances, custom-made additions and high-end materials, the ROI drops to 31.7 percent. Many home improvements can add a significant amount to the value of your home, increasing your share of equity. For larger jobs, especially outdoor ones, it may be worth hiring a painter, since professionals can buy paint at wholesale prices, know what type of finishes to use and are more adept at climbing stairs. Adding a bathroom, large room, or other necessary space to a home can increase functionality and add value.
