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Home Renovations That Make Sense
The pandemic has driven a boom in home improvement spending, according to Harvard researchers.
In 2020, US spending on home improvements and repairs grew more than 3% to nearly $420 billion, according to a report by Harvard University’s Joint Center for Housing Studies, as people rethought how to comfortably live and work during the pandemic. Americans’ nesting habits are primed to continue even as prices for appliances and materials, like wood, rise. Consumer data company Statista predicted that spending on remodeling will increase to $370 billion in the first quarter of 2022, up from $353 billion in the first quarter of 2021.
Homeowners who are shelling out for such upgrades look for the most return on their investments. From large-scale rehabilitations to small tweaks, renovations can increase property value, sometimes by hundreds of thousands of dollars. Typically, the average payback in a home’s resale value is 56% of the cost of its renovation, CNBC reported.
Some improvements, like adding in a kitchen island and expanding your homes multipurpose spaces, are more reliable value generators than others.
“The cost and effort involved in a home renovation or upgrade has a direct correlation to the impact it will have on value,” Michael Vargas, president and CEO of New York-based Vanderbilt Appraisal Company, told Insider. “Most surveys that have been completed tend to show that renovations to kitchen and baths are the ones that recoup owners’ investment and cause the most significant impact on home value.”
Homeowners should be picky when it comes to the renovations they make if they want to generate the most profit when it comes time to sell. Insider asked Vargas and HGTV experts to identify the top ways homeowners can add value to their properties.
A renovation project that can substantially increase the value of a property is an extension or major addition that expands the total square footage of the home, Vargas said.
“For example, if you expand the house footprint to create a sun room, family room, a home office, or a guest suite above garage,” he said. “These types of home renovations that enhance the functionality of the home can have the most significant impact and substantially increase home value.”
Islands can be appealing to buyers because they offer more storage and more counter space in the most important room of the house.
“Kitchens sell homes,” real-estate broker and renovation expert Egypt Sherrod, host of HGTV’s “Married to Real Estate,” told Insider. “They always have and always will because they tend to be the heart of the home. If you are looking to invest money anywhere in your home, look there first. Functionality and good design go hand in hand here.”
“Buyers will want to see themselves in the house and imagine their own style working in the space,” said Roth, the author of the soon-to-be-released book “House Story: Insider Secrets to the Perfect Home Renovation.” “A simple subway tile, peel-and-stick backsplash tiles, or penny round tiles are all classic and versatile options.”
Sherrod recommended finishing a basement or adding a walk-up attic. “When you increase your finished square footage, you instantly increase your comparables and value,” she said.
“In the warm states, outdoor living areas are a must,” she said. “Hardscapes, beautiful vegetation, decks, and screened porches will also help you increase your home’s stance in the marketplace.”
Hardscapes — non-living landscaping elements like paths, fountains, benches, or gazebos — can elevate a property’s livability and add value to a home.
If you can afford it, stainless-steel appliances are a huge plus, according to Roth. “This is almost always a big selling point for buyers,” she said.
Paint walls in neutral shades, particularly in the kitchen, Roth said.
Bold, bright colors aren’t as versatile, and usually won’t appeal to the majority of prospective buyers looking for a new home.
In the kitchen, homeowners should never choose or keep fluorescent lighting, according to Roth. Instead, she said, pick light fixtures that look new, but are not too trendy or style-specific.
Fixtures like glass orb pendants and lighting with matte black metal finishes will do the trick, she said. While a material like brass is on trend right now, it could turn buyers with differing tastes away.
These days, adults and children are working, playing, learning, and resting at home — and they need spaces that can serve all those needs.
“In today’s market, renovations and upgrades that add multi-functionality will strongly appeal to buyers,” HGTV “Love It or List It” star David Visentin told Insider. “This could range from fully finishing a basement or upgrading a kitchen to ruthlessly decluttering and carving out places to work and study.”
“I see a noticeable ‘wish list’ shift away from fully open concept spaces,” said Visentin, who helps buyers decide whether to create their dream homes by renovating or buying new properties altogether. “Buyers now seek dedicated areas in the home that offer separation for family members and allow them to ‘clock off’ and relax at the end of the work day.”