Looking To Add Value to Your Home? Here Are 5 Projects With the Highest and Lowest Return on Investment

Lindsay Walston

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Considering remodeling your home? Not all remodeling projects are created equal. While you might assume that you can recoup the costs of a remodel in an increased home value (or future sales price), the truth is some projects have a much higher return on investment than others. The National Association of Realtors (NAR) published the Remodeling Impact Report which studied the average return on investment of the most common remodeling projects. You might be surprised which projects had the highest return on investment, and which had the lowest:

5 Projects with the Highest Return On Investment

5. Basement Conversion to Living Area - 64% return on investment

  • 5% of REALTORS® suggested sellers complete this project before resale
  • 2% of REALTORS® said that this specific update helped close the sale

4. Insulation Upgrade - 83% return on investment

  • 4% of REALTORS® suggested sellers complete this project before resale
  • No REALTORS® said that this specific update helped close the sale

3. HVAC Replacement - 85% return on investment

  • 20% of REALTORS® suggested sellers complete this project before resale
  • 7% of REALTORS® said that this specific update helped close the sale

2. Refinished Hardwood Flooring - 100% return on investment

  • 27% of REALTORS® suggested sellers complete this project before resale
  • 5% of REALTORS® said that this specific update helped close the sale

1. New Wood Flooring - 106% return on investment

  • 16% of REALTORS® suggested sellers complete this project before resale
  • 5% of REALTORS® said that this specific update helped close the sale

5 Projects with the Lowest Return On Investment

5. Bathroom Renovation - 57% return on investment

  • 33% of REALTORS® suggested sellers complete this project before resale
  • 4% of REALTORS® said that this specific update helped close the sale

4. Kitchen Upgrade - 52% return on investment

  • 40% of REALTORS® suggested sellers complete this project before resale
  • 20% of REALTORS® said that this specific update helped close the sale

3. New Owner's Suite - 50% return on investment

  • 3% of REALTORS® suggested sellers complete this project before resale
  • <1% REALTORS® said that this specific update helped close the sale

2. Adding a Bathroom - 50% return on investment

  • 5% of REALTORS® suggested sellers complete this project before resale
  • 1% of REALTORS® said that this specific update helped close the sale

1. Closet Renovation - 40% return on investment

  • 4% of REALTORS® suggested sellers complete this project before resale
  • No REALTORS® said that this specific update helped close the sale

A little suprising isn't it? According to the survey, larger projects like a kitchen or bathroom remodel or addition show a relatively low return on investment. You certainly don't have to do everything in the name of resale value. Let's face it, a new kitchen or bathroom is much more enjoyable than fresh insulation. Plus, if you look a little closer you'll notice the kitchen upgrade went a long way to help close a sale (much higher than the single digit percentages of any other project). However, this study is worth keeping in mind if you are thinking of selling in the next year or two.

A word of caution, these are national statistics. Markets can vary widely by region so for more specific advice, consult with a local real estate expert to get the best information for your specific area.

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I initially discovered a love of real estate through my own experiences purchasing and flipping our first home in Roswell several years ago. As a REALTOR® with Atlanta Fine Homes Sotheby’s International Realty, I strive to exceed the expectations of my clients by providing an innovative and personalized real estate experience. I love helping home buyers envision the potential of a space to create their dream home, whether they are purchasing their first home or their 10th. I also enjoy helping homeowners maximize their investment through intentional staging, home preparation, and creative marketing strategy. A data and research nerd, I am always up to date on market trends and believe in the value of strong market knowledge in advocating for my clients.

Atlanta, GA
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