Aim for the Middle for Best ROI
In last week’s blog — How the Pandemic is Changing Home Improvement ROI — I recapped the 5 home improvement projects with the highest return on investment (ROI) specific to the Denver metro real estate market.
In that blog, I used data from the Remodeling 2020 Cost vs. Value Report (www.costvsvalue.com). For many of the projects tracked in the report, there is both a “midrange” option and an “upscale” option. While it might be tempting to go upscale with your project — choosing higher-end, fancier options and finishes — you’d be wise to resist. Here’s why.
Among the four upscale projects in this year’s Report, only one upscale project had a higher ROI than its midrange equivalent.
|Bathroom Addition||Job Cost||Resale Value||ROI %|
As shown above, adding an upscale 100 square foot bathroom costs $89,689 and yields $63,675 on resale. That’s an ROI of 71.0%. For approximately half the cost, you could do a midrange 48 square foot bathroom addition ($47,511) that would yield an ROI almost as high (67.2% when recouping $31,936 on resale).
ROI for each of the remaining upscale projects is shown below:
|Bath Remodel||Job Cost||Resale Value||ROI %|
|Major Kitchen Remodel||Job Cost||Resale Value||ROI %|
|Master Suite Addition||Job Cost||Resale Value||ROI %|
Aim for the Middle for Best ROI on Your Home Improvements
The lesson here: aim for the middle. Not only will your costs be lower with these midrange projects, but your ROI generally will be higher. By keeping your projects on the more modest end, you’re more likely to appeal to the tastes – and budgets – of a wider range of buyers.
Considering Home Improvements Before Selling? Let’s Talk!
Before you commit your money to a significant home improvement project in hopes of increasing your resale value, give me a call at 303-204-6494. My experience and recommendations can save you time, money, and disappointment, and can help you get the highest resale value.
About the Remodeling 2020 Cost Vs. Value Report
Containing detailed scope definitions and descriptions of the various projects, the Remodeling 2020 Cost Vs. Value Report is © 2020 Hanley Wood Media Inc. Complete data from the Remodeling 2020 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.