Picking Your Next Renovation for Profit or Preference
If you’re thinking about diving into a home design or renovation project, the first thing on your mind is probably not future resale value or potential buyers or even renters. You’re busy thinking through finishes, budgets, colors, and vendors, not the preferences of future owners of your property — whether in two years or twenty.
Even though it’s not on your mind now, one of the golden rules of home renovation is to always consider potential resale value. While tastes and trends will change over time, certain improvements will always improve market appeal for potential buyers or renters.
If selling isn't on your immediate horizon, making smart design choices now can pay off big when it comes time to move.
Renovations and Improvements to Enhance Livability and Value
When it comes to large-scale renovations or additions, the top two that impact market value are adding square footage and finishing an unfinished basement. Unfinished basements are particularly common in Utah, and while some buyers like the blank slate to make their own, many view it as unusable square footage as part of their purchase.
Adding Square Footage
Expanding your home's footprint, particularly by adding more bedrooms or bathrooms, is one of the best methods for improving its market value and giving you more room to live comfortably. When done well, these additions can significantly help your property compete on the market when it comes time to sell.
Finished Basement
Completing an unfinished basement is an immediate, valuable way to improve daily living in your home. From game rooms to theatre rooms to guest rooms, a finished basement has endless potential. If and when you decide to sell, it can also help with the finished square footage on the listing and your price per square foot.
major renovations and their ROI
When it comes to other major renovations and their hard costs, the best-performing (150%+ ROI) renovations and improvements are New Garage Doors, New Entry Doors, and Stone Veneer on the exterior. It’s no surprise that the top renovations with calculated ROI are focused on curb appeal. Enhancing curb appeal impacts both gut reactions from potential buyers and lasting impressions.
While considering ROI can and should be a driving factor in your renovation decisions, we always recommend balancing both the potential resale value and the benefit to your daily living. When you pair both with balance and thoughtfulness, you create a home that not only meets your needs but also resonates with future buyers or renters, ensuring your investment pays off in the long term.
Selecting Finishes and Design Styles
While a bold color or pattern might be your preference or match the trends of the day, hard finishes like tile, flooring, paint, countertops, and cabinets should generally be more neutral. With hard finishes laying a timeless foundation, you can always accent your home with bold and playful soft finishes that can be swapped out when it’s time to list. Soft finishes are things like drapery, decor, furniture, lighting, and more.
Opt for White Paint
White paint is universal, timeless, and makes spaces feel larger and more inviting. Neutral colors provide a blank canvas for buyers, helping them envision their style in the home. Even in a modern and simple design, you can incorporate textiles and lighting to balance the space and add personality.
avoid extremes in design choices
You’ll want to stay away from highly eccentric design choices. While a bold statement tile or funky stair banister might appeal to you, it can be off-putting to potential buyers who might see it as an additional cost to replace.
Not considering selling? Rentability still matters.
Renters generally prioritize different aspects than buyers do when it comes to renovation. Their selection of what properties to rent focuses more on the functionality of spaces and the location of the property rather than high-end finishes. In fact, most high-end finishes won’t give any appreciable difference in lease rates but can be more costly over time to maintain in a rental property.
Location, Bedrooms, Bathrooms
Renters prioritize proximity to amenities, schools, and public transportation. The old real estate adage of ‘Location, Location, Location’ still exists for a reason. Most buyers and renters look at specific areas before they look at interior differences. The number of bedrooms and bathrooms plays perhaps the most crucial role in desirability. Finishes can change, and gentle wear and tear can be ignored, but not having enough space to live will always be the deciding factor. These foundational elements, rather than luxury finishes, play the highest role in lease rates.
Practical Improvements Over High-eND uPGRADES
High-end finishes might attract some tenants, but the majority of renters care most about practical, well-maintained spaces. If you plan to rent, the two most important things are to get an inspection and get a home warranty. Complete all open inspection items, which helps avoid deferred maintenance and protects you against tenant complaints. Durable and easy-to-clean materials often win over more expensive, delicate options. Consider LVP for flooring options because it’s durable and replaceable; carpet requires annual maintenance, cleaning, and replacement more often than LVP.
