We love a good remodel. Not only does it spruce up your home and update the interior to your liking, it can also add tremendous value. In general, modest bathroom and kitchen remodels see an 80% return on investment. Follow these four tips to protect your remodel return on investment (ROI).
Tip #1: Keep it modest – Follow the 20% rule
Start your remodel planning process by getting a realistic understanding of your home’s value. You can figure this out by comparing sale prices of similar houses in your neighborhood, getting an appraisal, or using a site like Zillow. Once you know your home’s value, apply the 20% rule – spend no more than 20% of your home’s value on a bathroom or kitchen remodel. If you spend over 20%, you’re likely overdoing it and will see a diminished return on your financial investment.
Tip #2: Upgrade with future buyers in mind
When remodeling with a goal of ROI, a project budget should reflect a future buyer’s priorities and not just your own. For example, you might think that your cabinets are good quality and in good condition, but if they are made with a dated wood species, finish, or door style, no matter how many thousands of dollars you put into new countertops and backsplash, you’ll still end up with dated cabinets that aren’t relevant to most buyers. In fact, in some cases, it may make sense to spend less on the countertops and backsplash and prioritize an affordable cabinet replacement.
Tip #3: Design complete – The wow factor
What does design complete mean? Basically, you want visitors to enter your home after a remodel and say, “Wow! Did you just remodel?” If you are missing the “Wow factor,” home buyers will not assign value to what you consider a charming remodel. The key to achieving the “Wow factor” is having the discipline to focus on only the kitchen or the bathroom and allocate a realistic budget. A design complete remodel should fully transform the space. When you try to do too many things, it often comes out looking like the space was updated but not remodeled.
Tip #4: Is it sellable?
Ask yourself the question, “Is this remodel “sellable?” Would a potential buyer happily pay 80% of the remodel cost on top of the normal home price? The goal of the remodel is to create undeniable design improvements with mass appeal, now and in the future. Making remodel choices that are “sellable” can be difficult. Let your designer be your guide to the best, personalized remodel path. At Eheart, our designers provide several remodel paths for your style that all map to financial success.