Any form of home renovation can easily cost you a couple of hundred dollars. Depending on the scale of the project, the extent of manpower needed, and the type of materials you choose, a home renovation can bite a big chunk off your savings. That said, there are many reasons to renovate a property, whether it’s a single-family home, a townhouse, or a condominium unit. Read on further as we discuss some of these reasons.
Boost Resale Value
If you plan on selling your current home, making a few simple renovations can increase your ask price for the property. In fact, for most repairs and renovations done, even if it doesn’t increase your resale value, you recoup the upfront cost of the renovation at the very least. For instance, replacing your worn out garage door costs just a hundred dollars shy of $4,000 on average. The average resale value of that, according to experts at Bankrate, is $3,663. That’s above 90% of costs recouped when you resell the property. And while you still live in the property, you get some use out of the newly installed garage door.
Increase Rental Property Income
If you are a property owner who rents out a house, making renovations and upgrades that yield better quality of life for the tenant/s allow you to increase the monthly rent for that property. For instance, you can update the rental property’s bathroom or kitchen style, add a deck or patio, or install a new furnace or boiler system. That said, make sure not to spring the rent increase to your tenant/s in an abrupt manner. Give them time to consider their options before you start any construction or increase the rent.
Know What to Renovate and What Not To
Luckily, there is public information available for free that details cost estimates for specific renovations in each state in the U.S. Realtor magazine, for instance, releases a “Cost vs Value” report every year that makes an extensive cost comparison of remodeling projects and payback projections that can be expected by homeowners. Remodeling projects that yield the highest average cost recovery include wood deck additions, siding replacements, and minor kitchen remodeling while two-story upgrades and basement remodeling are at the bottom percentile.
When considering whether or not you should renovate your home, look at all the factors that come into play, including average cost of materials and contractor services in your area, the type of renovation you are targeting, etcetera. Only then can you determine if the benefits of renovation outweigh its costs.