Mar 28
Acton Construction

Home Remodeling Projects with the Highest Return on Investment

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How to Boost Your Home Value in Northern California

People choose to remodel their home for a variety of reasons. Their motivation may stem from needing to keep family close—building separate but nearby living quarters for an adult child or parent; or a desire to repurpose an existing room—turn an unused bedroom into an office, art studio or guest suite.

There’s also the common need to keep your home fresh and functional. Ready to ditch that old Formica countertop or dated vinyl flooring? Need to add space to your home, but don’t want to move?

Updating your home comes with all sorts of benefits. Aside from the important reason of making your living space more livable, there’s also the added benefit of increasing your home’s value. If you were to remodel your home today, where would you get the most return on your investment?

Below is a list of upgrades that have the most impact on the resale value of your home, particularly in today’s Northern California real estate market.

TIP: If you’re considering selling your home in the near future, be sure to consider design selections (fixtures, flooring, colors, etc.) that will appeal to a broader market.

Fix the Fundamentals

Your initial instinct when remodeling your house might be to tackle the kitchen or bathroom first. Think again. If your roof leaks, the windows are drafty, or your HVAC system is outdated and inefficient, you’ll want to address these items first. The last thing a new homebuyer wants is to shell out money for a new roof or replacement windows upon purchase.  While these aren't exciting ways to spend your remodeling budget, you'll more than recoup your costs and ensure nothing stands in the way of the sale.

Consider Curb Appeal

A smart person once said, "You never get a second chance to make a first impression."  Not only is this true in a job interview, but it also applies to your home. If your front door is worn and outdated, the garage door is warped or damaged, and your siding needs paint, potential buyers aren't going to be motivated to come inside.  According to the Remodeling 2018 Cost vs. Value Report in the San Jose region, homeowners who replaced their garage doors recouped 208% of their expenditure, and upgraded siding garnered 124% in recovered costs.

Home Exterior with Curb Appeal in Los Altos, CA

Additionally, as a  California resident, you understand the importance of water conservation. If you have a yard that requires a lot of water and maintenance, this could be a turn off for some buyers, especially millennials who are concerned about protecting resources and minimizing costs. According to Consumer Reports, installing a water-smart yard and boosting the curb appeal of your house could garner you an additional 3% to 5% in your home's sale price.

Keep Your Focus on Kitchens

Not surprisingly, kitchens are one of the most popular spaces to remodel. A 2017 Houzz & Home Renovation report states that over 29% of all homeowners who renovated focused on the kitchen.  

If you're looking to sell your home sooner rather than later, you may consider modest upgrades—more of a mid-level renovation, rather than a high-end remodel. For more information about different types of kitchen remodels (basic, mid-level vs. high-end) read this helpful article.  The Remodeling 2018 Cost vs. Value report in the San Jose region cites that mid-level kitchen remodels recouped over 105% of expenditures last year.

What are new homeowners looking for?

New homebuyers (especially first-time buyers) are looking for updated kitchens with clean lines and a fresh look and feel. These upgrades may include new cabinetry, cabinet hardware, fixtures,  energy efficient appliances, countertops, kitchen backsplash and flooring. Consumer Reports states that hot-button words like stainless steel appliances and Quartz countertops are upgrades many homebuyers are looking for.

If you plan to live in your home for 10+ years, you may want to plan a high-end kitchen remodel that you can enjoy for many years to come, as well as make your home more marketable in the future.  While the ROI is not quite as high for a major upscale kitchen renovation in the San Jose area (85%), according to the Remodeling 2018 Cost vs. Value report, it still works out to be a worthy investment to attract future homebuyers, while still allowing you the opportunity to cook and entertain in the lap of luxury.

Remodeled Kitchen with Modern Tile Backsplash and Grey Solid Surface Counters

Bring on Bathroom Remodels

Second to kitchens, bathrooms are also a smart choice when it comes to remodeling an area of your home. It’s the new ideal space for homeowners to relax and unwind. However, before you jump into making a decision to remodel your bath, ask yourself if you have enough bathrooms in your home. Do you need to add a second bathroom? If you only have one, you need to take it into consideration.  "A National Association of Realtors study by Florida State University Professors G. Stacy Sirmans and David Macpherson found that adding a second bathroom increased the sale price of a home by 8.7%, more than twice the rate for adding a bedroom."

Custom Tile in Walk in Shower

The numbers also fare out in a homeowner's favor when remodeling a master bathroom.  According to the Remodeling 2018 Cost vs. Value Report in San Jose, you can expect to get an ROI of 122% for a mid-range renovation, and a 112% ROI on an upscale bathroom remodel.

Bathroom Design Considerations

If your bathtub is old and tired, consider replacing it with an oversize curbless shower with tile surround.  Universal design features are exactly what potential homebuyers are looking for these days. Ditch the boring drop-in sink and replace it with a sleek undermount or vessel sink. Install better lighting and increase storage. Consider investing in a beautiful spa-like experience that you and your family can enjoy for many years to come while reaping the benefits of a higher resale value in the future.

ADUs (Accessory Dwelling Units)

Another booming trend in Northern California are the ever-popular ADUs, or Accessory Dwelling Units, also called in-law suites, guesthouses, backyard cottages or granny flats.  Due to the rising population and limited housing in Silicon Valley and Santa Clara County, newly relaxed ADU regulations have encouraged many homeowners to consider adding ADUs to their property. Common uses include housing aging family members, helping grown children find a place to live in this challenging rental market or generate extra income using the space over a garage or in the backyard. 

While it’s been hard to pin down exactly how much resale value an ADU might add to your property, a 2012 study published in The Appraisal Journal titled Understanding and Appraising Properties with Accessory Dwelling Units surveyed 14 ADU-enhanced properties in Portland, Oregon. The study concluded that ADUs generally contributed about 25% to 34% of each property’s assessed value. Furthermore, adding an ADU demonstrated an average of 51% increase in resale value. For more information, read our recent post on “This is What Could Happen to Your Resale Value if You Add an Accessory Dwelling Unit (ADU) to your Property”.

Backyard Accessory Dwelling Unit in California

Acton Construction is a design/build remodeling firm specializing in kitchen and bathroom remodels, room additions, whole house remodels and ADUs, serving local homeowners in Silicon Valley and Santa Clara County, from Menlo Park to San Jose.

If you’re ready to embark on a home remodeling project or add an ADU onto your property, we’re ready to guide you through the process and build certainty into your next home remodeling project. Just give us a call 408-369-1103 or fill out our online request form.

For design inspiration visit our Design Portfolio.  Or, sign up today to receive our monthly eNewsletter which is chock-full of home remodeling tips.

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