Top 5 Renovations to Increase Home Value in 2023
The last few years have been a whirlwind for real estate, and 2023 looks to be no exception.
As the market changes, so does our list of the best home renovation projects to increase value. Staying put during the pandemic gave rise to extravagant outdoor kitchens and elaborate home offices.
Homeowners are increasingly leaving their homes, and smaller renovation projects and updated kitchen, bath, and living spaces will provide the best return on investment (ROI) in 2023.
We've compiled data from the National Association of Home Builders (NAHB), the National Association of the Remodeling Industry (NARI), and key insights from our own local experience to help you prioritise your project list.
Renovations that will increase the value of a home in 2023
Remodeling can be a wise investment, but keep in mind that there is no guarantee that you will recoup your investment.
According to Remodeling magazine's 35th annual Cost vs. Value report, an assessment of several common household remodelling projects, the average return on 22 popular remodelling projects last year was around 59%.
This is a continuation of a downward trend that has occurred in recent years. The average ROI for remodelling projects in 2021 was 60.1%. In 2020, the figure was 63.7%.
While you don't want to have renovation regrets by installing ultra-specific fixtures and finishes, some projects now have a higher ROI due to buyer demand and post-pandemic priorities.
Consider the following improvements to increase the value of your home:
1. Improve your curb appeal
Curb appeal is an important first impression for buyers, and it can get them excited about the home as soon as they drive up. In fact, experts estimate that homeowners can earn a 238% ROI on curb appeal projects that cost an average of $3,467.
Take care of basic yard maintenance (cut grass, weed control, fertilization)
Clean up the landscaping (shrubs, walkway, and flower beds)
Add additional outdoor lighting. (solar lighting is especially appealing to younger buyers)
Go beyond the greenery to add even more value to your asking price. A fresh coat of exterior paint adds an estimated 152% ROI, or approximately $7,600 in resale value. A new garage door has a resale value of about $2,800 and an estimated ROI of 133%.
The 35th annual Cost vs. Value report from Remodeling magazine discovered that you can often get the best ROI for renovations that buyers see before they even walk through the front door. Garage door replacement, siding updates, adding a deck, and creating a a more appealing entryway all have a high ROI.
2. Create a More Functional Floorplan
Living square footage frequently raises your appraised value. The functionality of the floor plan is what truly makes a space livable. Smaller bathrooms and kitchens in their own rooms are often considered out of date, and buyers aren't as willing to make them work as they once were.
Consider changing the floor plan or adding more space to make the house more functional for modern living.
Bathrooms that appear larger - tweaks like sleeker fixtures and glass shower doors can help here.
Kitchens that are linked to other rooms, such as eat-in kitchens
Walk in closets
Increasing kitchen prep space
If you have a 400 to 1,500 square foot unfinished basement, adding flooring, drywall, and other finishing touches to make it livable space has a potential ROI of 70% by converting it into a "specialty room" that more than 60% of buyers desire.
If you are unable to add more space to your home, you can make it more functional by converting unused spaces. Consider converting an unused home office into a bedroom or a dining room into a flex space.
3. Upgrade Your Master Bathroom
Buyers want bathrooms that feel like they're in a spa. According to the builders survey, features that will make a bathroom stand out in 2023 include rain shower heads, double-sink vanities, extra storage, soaking tubs, and anything else that contributes to a spa-like experience at home.
The luxurious experience in a bathroom is enhanced by having spacious bathrooms. We are finding that frequently buyers want larger bathrooms than they had previously. Look for ways to add mirrors or rework the floor plan with sleeker, slimmer fixtures to create the illusion of more space.
4. Add a Pantry or Kitchen Island
According to NARI, it is more common since the pandemic to have more than one person cooking at the same time — and people with different food prep and storage needs. Multiple sinks, different refrigeration options, flexible pantry and refrigerator space, and a convection microwave to heat meals between conference calls and video meetings are all desirable trends.
According to the NAHB, 81% of buyers value a double kitchen sink or a walk-in pantry. Among the most popular kitchen upgrades requested by buyers were:
A kitchen island (64%)
A walk-in pantry (62%)
More drawer and cabinet storage (57%).
All provide additional counter space for gadgets, unloading groceries or takeout, and preparing food without colliding with others. They also recoup a significant portion of the installation costs. According to one survey, walk-in pantries alone yield 76% of their average cost.
Expand The Outdoor Living Space
Buyers often appreciate functional outdoor space, but this feature now has even higher appeal. One survey of 2,000 homeowners found that participants spent 14 hours a week outside, or three hours more than before the pandemic.
In addition, 7 out of 10 said adding to their home’s exterior spaces had become a new hobby, and 73% said being outside was “therapeutic.”
Touch up your garden or hardscaping, then consider incorporating any of these sought-after features:
Homeowners in certain Waterloo Region neighbourhoods can increase their home’s value by up to 7% if they add a pool. However, adding a pool isn’t always the right call. Talk to your real estate agent to get advice on the value a pool may or may not add to your property.
Deck or patio
Decks gained greater popularity during the pandemic, with one study from Principia Consulting reporting that 31% of homeowners built a new deck in 2020 where none previously existed, up from 25% a year earlier.
While costs vary based on materials and size, you could recoup between 62% – 65% of your costs if you decide to build a deck. The average cost to add a wood deck in 2022 is $19,248. Adding a composite deck in 2022 cost a bit more at $24,677.
Before You Renovate, Get a Home Value Estimate
What is the current value of your home? Team Pinto can provide you with an honest, expert evaluation of your home at no charge, so that you can plan any remodeling or renovation projects with a better idea of what may or may not add value. Contact us today to get one started.