For Home Owners

Adding Resale Value: Renovation Or Home Addition?

san-francisco-renovation

Are you asking yourself: “Should I remodel or build an addition onto my home?” Or, “Which adds more value to homes – remodeling or additions?”

Remodeling an existing interior or adding onto a home, both will add value if done correctly — but which option is best for you?

REMODELING

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If your existing interior isn’t up to date, it makes the most sense to start with a remodel. An addition won’t look cohesive if part of the home looks dated while the rest looks brand new. Renovations come in all sizes, from minor to major changes, and it’s best to consult with a professional when deciding on the changes that will offer a higher return on investment (ROI), both long term – energy efficient changes such as solar panels or increased insulation – and short term (real estate market value). However, here are the most common rooms to remodel before selling a home:

KITCHEN & BATH REMODELS

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Kitchen and Bathrooms can be the most expensive rooms to remodel, but will increase your home’s resale value the most, resulting in more than 95% ROI, according to this 2017 remodeling report. These are the rooms buyers look at at first and foremost since they are the rooms used most, thus handling a lot of daily wear and tear. Having an updated kitchen and bath leaves homeowners more than relieved to see they don’t have to take on the challenge. For growing families this is an additional plus, as kitchens are the go-to place before and after work and school. Being able to reuniting after a long day in a freshly designed kitchen will boost positive interactions and foster emotional value for those living there.

ATTIC & BASEMENT REMODELS

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Attic and basement remodels may feel like add-ons but are most often covered under renovations. Since the foundation, load-bearing walls, floors, and ceiling are all already in place, designing a living space, whether a small apartment, family room, guest room, or home theater, is a relatively easy way to add immense value to a home. The more usable space in a home the higher the value.

EXTERIOR DESIGN

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Exteriors don’t usually undergo major changes, but making sure the outside aesthetic is up-to-date will pay off in the long run. To prevent potential buyers from judging your home on first glance, don’t overlook the importance of a pleasing exterior design. From minor landscaping to fresh paint and exterior hardware, these easy changes will invite viewers on in to see the rest of your beautiful home.

ADDITIONS

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If your home’s interior is up to date, home additions are great for value purposes. Construction costs are often much less than what one sells their home for, as Home Guides points out, with a national average of $80 – $200 added resale value per square foot ($300+ in more populated areas and in premium marketplaces such as California), this makes for a great investment if done wisely. Home additions can go upwards or outwards, depending on your lot space and options. Widening your single story home works well if you have the land while those in tighter urban areas often decide to extend upwards, building second and third floors. A realtor can help determine which additions make the most sense, such as if it’s more beneficial to add-on a second bathroom versus a third bedroom.

Unused property space is ideal for opening up a home and adding value in other ways. Adding a garage, attached or detached, to your home will instantly increase the selling price of your home, especially in areas where they are less common and seen as a luxury, i.e. in populated urban areas.

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Sunrooms and patios are some of the easiest ways to add living space onto a home. Not needing plumbing, pipes, closets, backsplashes, or extensive electrical work, these are always a popular choice. However, while this is may be one of the simplest home add-ons, it’s not always a great investment. Do your homework and understand what potential buyers are looking for in your area before committing to any building.

Most Appreciated Home Renovations & Additions:

As each home differs from the next, so does the neighborhood and the people living in it. One bedroom urban apartments and three bedroom family homes obviously cater to different demographics, which is important to keep in mind when renovating for increased resale value. To get a clearer idea of what renovations will benefit you the most, here are is a list curated from remodeling.hw.net, based on 2017 figures for West Coast properties.

• Fiberglass attic insulation (attic renovation) – 122% ROI
• Steel entry door (exterior design) – 100% ROI
• Minor kitchen remodel – 95% ROI
• Two-story addition – 90%
• Basement remodel – 86% ROI
• Wooden deck addition – 85%
• Family room addition – 85% ROI
• Bathroom remodel – 75% ROI

If you’re thinking about putting your home on the market, it’s best to consult with a realtor when deciding how to renovate and/or add onto a home as they can help foresee which additions will be most valuable in your given area and market.

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