Home Upgrades: Do They Boost Value?

Enhancing Home Value Through Renovations: A Comprehensive Guide

In today’s dynamic housing market, home renovations have become a strategic investment for many homeowners. As the cost of labour and materials continues to rise, and with elevated mortgage rates, the decision to renovate rather than relocate is gaining traction. This guide explores the potential increase in property value from various home improvements, providing expert insights and practical tips to help you make informed decisions.

The Impact of Renovations on Property Value

Renovations serve multiple purposes: they can repair damaged areas, update outdated aesthetics, replace aging fixtures, and add new functionality to unused spaces. But the critical question remains: do these improvements significantly enhance property value? The answer is multifaceted, depending on the type and quality of the renovation.

Expert Insights on Renovation Value

Renovation costs have surged due to inflation, supply chain disruptions, and increasing demand. As Clayton DeKorne, Chief Editor of JLC Group, notes, “Exterior replacement projects tend to fare better in increasing home sale prices compared to discretionary indoor projects. They contribute to curb appeal, impacting a buyer’s first impression and the building’s resilience to weather.”

Key Renovations That Add Value

1. Garage Door Replacement

• Average Cost: £3,500
• Average Resale Value: £6,800
• ROI: 194%

A new garage door not only enhances curb appeal but also offers a high return on investment. Modern, heavy-duty garage doors can nearly double the value they add to a home, making this one of the most lucrative renovations.

2. Entry Door Replacement (Steel and Fibreglass)

• Steel Door Cost: £1,800
• Steel Door Resale Value: £3,400

• ROI: 188%

• Fibreglass Grand Entrance Cost: £8,700

• Fibreglass Grand Entrance Resale Value: £8,500
• ROI: 97%

Replacing the front door with steel or fibreglass options significantly boosts energy efficiency and curb appeal. These doors provide enhanced security and insulation, making them attractive to potential buyers.

3. Manufactured Stone Veneer

• Average Cost: £8,700
• Average Resale Value: £13,400
• ROI: 153%

Stone veneer imparts a classic, elegant look to a home’s exterior. This upgrade not only enhances aesthetic appeal but also delivers a substantial return on investment.

4. Minor Kitchen Remodel

• Average Cost: £21,000
• Average Resale Value: £20,200
• ROI: 96%

A minor kitchen remodel, focusing on cosmetic updates like refacing cabinets, replacing countertops, and updating appliances, can greatly increase a home’s marketability without a hefty price tag.

5. Siding Replacement (Fibre-Cement and Vinyl)

• Fibre-Cement Cost: £16,000
• Fibre-Cement Resale Value: £14,200

• ROI: 88%

• Vinyl Cost: £13,500

• Vinyl Resale Value: £12,000
• ROI: 89%

Replacing old siding with fibre-cement or vinyl not only refreshes a home’s exterior but also improves its energy efficiency and weather resistance.

Adding Bedrooms and Bathrooms: A Smart Investment

Adding a Bedroom

• Average Cost per Square Foot: £110
• Potential Value Increase: Up to £38,000

Adding a bedroom, particularly in attics or as master suites, can significantly enhance a home’s value. However, ensure compliance with local regulations regarding egress and square footage.

Adding a Bathroom

• Potential Value Increase: Up to 5.7%

An additional bathroom can transform a listing from a “3/1” to a “3/2,” making it more appealing to buyers. This change is particularly impactful in areas where homes with more bathrooms are in demand.

Finishing a Basement: A Valuable Upgrade

• Average Value Increase: 6.6%

Converting a basement into a functional living space can add substantial square footage to a home, appealing to buyers looking for extra rooms for recreation or storage.

Kitchen Renovations: Balancing Cost and Value

• Average Value Increase: 4.8%

Updating an outdated kitchen can be a wise investment. Focus on modernizing fixtures, appliances, and finishes to attract buyers while keeping costs in check.

The Pool Dilemma: To Add or Not to Add

• Average Value Increase: 7.3%

While a pool can enhance a home’s appeal in warmer climates or affluent neighbourhoods, it may deter buyers in regions where maintenance costs are a concern.

Calculating Return on Investment

To estimate the return on investment for renovations, consider the local real estate market, the cost of the improvements, and the potential increase in home value. Online calculators can provide tailored estimates based on specific markets, helping you make informed decisions.

Final Thoughts: Making the Right Renovation Choices

Home improvements can significantly enhance both the comfort and market value of your property. By focusing on strategic renovations that offer high returns, you can ensure that your investment pays off when it’s time to sell. Whether you’re upgrading for personal enjoyment or to increase your home’s resale value, careful planning and execution are key to maximising your return.

For personalised advice and assistance, consider consulting with top neighbourhood real estate agents who can help you navigate the complexities of the housing market and achieve the best possible outcome for your home renovation projects. Visit FastExpert to find your ideal real estate agent today.