How Bathroom & Kitchen Renovation Projects Can Affect the Value of Your Home
What is the single biggest reason why homeowners seem to always feel a need to update the features of their home?
The reason is that the dominant home design trends keep changing. The styles most favored by building/interior design professionals and buyers are always being updated. So owners feel a need to keep pace with these developments. The two areas, which get the most attention during renovations, are kitchens and bathrooms.
Kitchens draw attention because they are the focal point for many activities that go on in the home. They serve as the hub where families trade gossip and entertain guests. And bathrooms are where we go to take care of the sanitary needs of our bodies. So it makes sense that we want bathrooms to be as comfortable and appealing as possible.
Basically, homeowners focus on bathrooms and kitchens renovations because:
- These two projects deliver the highest joy factor of any home renovation project. The joy factor is the amount of pleasure homeowners derive from a remodeling project. That is how much the upgrade enhances the function of the home and their enjoyment of it.
- The second factor is the return on investment of these two projects. Bathrooms and kitchens are the two rooms that have the most influence on a would-be buyer’s decision to buy a home or not. They also determine if a buyer will make an offer that is below or above the owner's anticipated sales price.
But just because an owner splashes money on bathroom and kitchen renovations, it does not mean they are going to reap the above benefits. Especially when trying to improve the resale value of a home, as Five Star Property Management explains, renovations do not always guarantee a proportionate return on investment.
What a homeowner gets out of a project when they sell their home is not determined by how much they spent on the renovation. To get the most out of a bathroom or kitchen renovation, homeowners should know which exact projects are the best and why.
How Bathrooms Improve a Home's Value
Three things determine the impact of a bathroom renovation on a home's value:
- The condition of the rest of the house
- The specific renovation that was done
- And the state of the market in the home's location
Did you know that homeowners only have control over the first two?
Generally though, most bathroom renovations cost $20,000-$65,000 and will return 60.2%-67.2% of the original cost of the investment. However, it is possible to get a higher return on investment while spending less.
But to be able to do this, homeowners must consider the whole house. Rather than doing renovations in isolation, they must fit the bathroom project into the overall style and functionality of the home. They must also factor in the overall home design of the neighborhood.
Based on this, the most impactful bathroom renovations are:
- Repainting walls and cabinets
- Updating the lighting fixtures
- Installing new faucets and toilets
- Replacing sinks and countertops
- Implementing energy-efficient upgrades: shower, sink, and toilet optimized for low flow
- Walk-in shower with rain shower head and glass enclosure
- Overhauling the bathroom floor
- Installing radiant heating mats beneath floor tiles
- Adding a new bathroom
How Kitchens Improve a Home's Value
Over 80% of surveyed buyers name the kitchen as one of the most important rooms in the home. And the majority of them say they would have paid more if the kitchen in their newly-acquired home had certain features.
What this means is that a kitchen renovation has the potential to not only make a house more attractive to buyers, it can also move them to pay more for the property.
Modest estimates put the average ROI for a kitchen project at 81% for minor kitchen remodels that cost no more than $21,000. And for more upscale projects of up to $68,000, the ROI is between 54% and 64%.
The wide disparity shows that the returns owners get does not depend on what they spent but on the relevance of the project. In fact, it is entirely possible to achieve returns of over 90% by being very intentional about the upgrades that are implemented in the kitchen.
When upgrades are selected for how they complement the style of the home and with a view to completing it functionally, they tend to be more profitable. Based on how much they put back in homeowners' pocket, the most impactful kitchen renovations are:
- Changing the cabinet hardware
- Updating plumbing hardware and sink
- Repainting or refinishing cabinets
- Repainting the kitchen
- Repainting functioning appliances
- Installing a tile backsplash
- Updating kitchen lighting
- Installing granite countertops
- Buying new appliances
- Upgrading the kitchen floor