With homeowners staying in their homes longer, many are opting for remodeling projects.
Whether it’s to raise a home’s value, replace outdated or broken features or redecorate, homeowners are spending time and money on these projects. Which ones pay off? The National Association of Realtors® 2019 Remodeling Impact Report asked Realtors® what projects appeal the most to buyers and which ones are the best value for resale.
The top three projects for best appeal to buyers and best value for resale were identical, according to Realtors®. And the kitchen is what pays off. The top project is a complete kitchen renovation, followed by a kitchen upgrade and then an HVAC replacement.
A complete kitchen renovation won’t be cheap, but it can be worth it, Realtors® reported. The average cost estimate is $68,000, and Realtors® said they think the return on investment is $40,000, or about 59%. Twelve percent of Realtors® reported they suggested a complete kitchen renovation to sellers before putting the home on the market, and 10% said it helped close a sell.
In addition to better home sale value, 24% of homeowners said they underwent a complete kitchen renovation to upgrade worn-out surfaces or other features, while 20% said they were new owners looking to customize the kitchen to their own preference. Overall, 46% reported better functionality and livability since the project.
A kitchen upgrade provides 29% better functionality and livability, according to the report. Nearly one-third of people reported completing this project to upgrade old or work-out features, while 20% redid their kitchens because they were ready for a change. Eighty-five percent of owners who renovated their kitchen reported they have a greater desire to be home post-project.
The average cost estimate of this project is $38,300, while Realtors® estimate owners recoup about $20,000, or 52%. Forty percent of Realtors® have told their sellers it would be best to renovate before listing, while 20% believe it helped the house close.
HVAC replacement is the most affordable and provides the best return of the top choices of projects. The project is estimated to cost around $8,2000, but Realtors® estimate the cost recovered is $7,000, or 85%. One in five Realtors® have suggested to a client that they replace their HVAC before listing, and 7% said it helped close a sale. The most common reason homeowners complete this project is to improve energy efficiency.
The three projects that were predicted to be least appealing to buyers and lowest resale value included closet renovation, insulation upgrade and attic conversion to living area.
What home improvement projects do you think are best for homeowners to complete before listing?