Renovations That Add Equity—And Don’t
Every homeowner wants their house to be perfect, but are some renovations really worth the cost? Maybe you’re sick of starring at an outdated kitchen or you absolutely hate your driveway’s cracks. Whatever issues you have with your home, there are some renovations you can do that will add value—or equity to your home—and some that just won’t. In order to put your dollars to work and earn you more for your home in the long run, here are some of the top money-wasting and money-making renovations you can do.
Master Suite Additions
We talked a bit about things homeowners unknowingly waste money on, but this renovation is one we didn’t discuss in detail. Adding on a master suite rarely adds enough value to your home to offset the expense. In fact, you will only add 67.5% of the cost of the renovation to your equity. That means nearly 33% of your addition will come right out of your pocket and never come back to you. And since master suite additions run a homeowner $100,000 on average, that’s almost $33,000 you won’t ever see again.
Front doors are actually one of the highest equity-yielding modifications you can make to your home. On average, a new front door can return 96.6% of its cost in added equity. If you are willing to salvage and do some of the work yourself, you can make a ton of profit.
Garage doors also make the value of your home go up. Replacing your garage door can add 83.7% of its cost in equity. If you’re willing to put in some work to restore your garage door, this can add even more.
You might not think that adding a wooden deck onto your home would increase value, but it does! Turns, out, you can recoup 87.4% of expenses in added equity when you build a wooden deck on your home. Wooden decks average about $35 per square foot, so you won’t have to pay too much out of your own savings to enjoy added equity and a place to hang out while you’re living there.
Adding a bathroom may be a necessity, but unfortunately, you’ll only make up 67.1% of the expense in equity. And since bathroom additions cost an average of $30,000-$40,000, that’s a lot of money down the drain—literally. If you are planning on adding a bathroom to your home, just make sure you do it in the most cost effective way and don’t go over the top so you can lower the margin between added equity and out-of-pocket expense.
Small Kitchen Remodels
Remodeling a kitchen modestly can run you about $18,000. However, this is one of the best renovations you can do as a homeowner. Minor kitchen remodels add 82.7% of their cost in equity, so for $18,000, you’ll have almost $15,000 in added equity right off the bat.
Transforming an attic into a bedroom goes over well when it comes to your equity—adding 84.3% of its cost in value. Depending on how extreme you go with it, you can make a lot of profit on a modest makeover.
Home Office Remodel
You may be psyched about your home office renovation, but future buyers won’t see it as something they need to spend more for. Home offices only yield about 48.9% in added equity, so doing small cosmetic changes that don’t cost a lot are your best bet if you need to spruce up your office.
People will probably be more willing to spend money on a tanning booth appointment than extra for a home with a sunroom. In fact, sunrooms only make about 50% of their cost back in equity. How about you set a chair out in the backyard instead of going for an expensive renovation?
Don’t get us wrong, we’re not telling you to halt your home renovations. We just want you to think twice about how much money you sink into certain areas of your home because some will reward you in equity and others will rob you blind.