There’s no way around it: remodeling your home, whether it’s a small renovation or a large one, is a major decision. It entails lots of work, a large time commitment, as well as major financial decisions.
When considering a renovation, it’s helpful to think through what your return on investment (ROI) for a project like this would be. While this will, of course, vary based on your home’s value, your location, and how long you intend to stay in your home, today, we’re discussing national averages for renovation costs so that you can weigh these numbers for your consideration.
BEST ROOMS FOR ROI ON RENOVATIONS
If you’ve house-hunted, you know how important kitchens and bathrooms are. Buyers know how expensive these rooms can be to renovate, so walking into a home with updated kitchens and bathrooms may make it sell much faster. If you’re a homeowner, on the other hand, it might be difficult to know just how much to invest in a kitchen or bathroom renovation before preparing to sell. Here’s a look at the average numbers.
KITCHEN RENOVATION ROI
When renovating a kitchen, you can, more or less, go two different ways: a full-out major renovation, or a more minor, “face-lift” type of renovation. Generally speaking, the latter is likely to see the highest ROI. A major kitchen remodel means new appliances, new flooring, new cabinetry and countertops, and a potential change to the structure of the room itself. A minor kitchen remodel might mean new countertops, a fresh coat of paint, and new backsplash and hardware.
This Old House provides some helpful average numbers regarding renovation ROI.
MINOR KITCHEN REMODEL
Average Cost: $14,773
Average Resale One Year Later: $13,039
ROI: 87%
MAJOR KITCHEN REMODEL
Average Cost: $38,769
Average Resale One Year Later: $31,344
ROI: 80%
Zillow also provides a few kitchen remodel cost averages for consideration. They break it down into three subcategories: minor, midrange, and upscale:
MINOR KITCHEN REMODEL
Average Cost: $21,198
Average Return: $17,193
ROI: 81%
MIDRANGE KITCHEN REMODEL
Average Cost: $21,198
Average Return: $17,193
ROI: 59%
UPSCALE MAJOR KITCHEN REMODEL
Average Cost: $125,721
Average Return: $67,212
ROI: 35.5%
While the data from these two sources vary some, you can see that the average ROI is higher for a minor kitchen remodel than a major kitchen remodel by a relatively significant amount. If you’re planning to sell your home, it’s likely more beneficial to do a smaller renovation than a larger one.
BATHROOM RENOVATION ROI
Like kitchens, bathrooms tend to be one of the most important rooms for buyers—and for good reason. Seeing an old, dated bathroom in an otherwise modernized home can be deflating. Plus, we spend a large amount of time in our bathrooms each day, so it’s a space that we want to experience as a restful retreat.
According to Zillow, a bathroom remodel yields a decent ROI. Here are their averages:
MIDRANGE BATHROOM REMODEL
Average Cost: $19,134
Average Return: $13,422
ROI: 70%
UPSCALE BATHROOM REMODEL
Average Cost: $61,662
Average Return: $34,644
ROI: 56%
Like the kitchen remodel, the more mid-range level of bathroom renovation tends to lead to a greater ROI.
TIPS FOR THINKING THROUGH RENOVATION ROI
1. Consider your location and the houses comparable to yours. It’s not a great idea to “over-renovate” if your renovations end up making your house “over built” for your neighborhood.
2. Of course, renovating your home so that you can enjoy it will give you greater ROI, since you’re investing back into it. As This Old House notes, “the longer you stay in your house, the more likely you are to recoup your costs.”
3. When renovating, go with flow of your home’s existing architecture. For example, an ultra-sleek modern bathroom in a cozy, cottage-y house that features a lot of old world charm might feel disconcerting.
4. If you’re renovating to sell, go with neutral, classic design. (Here are our tips on how to do that.)
A renovation of any size is a big financial decision. If you have questions about the design process or would like to speak with one of our experts about your space’s potential, our Bender consultants are always here to talk.
