Which Residential Renovations Offer the Best ROI?
Whether you are planning to put your home up for sale or you are simply looking to improve it for your own benefit, getting the best return on your investment is always a priority.
But which residential renovations add the most value to a home, over and above the costs of the project? If looking to maximise your homes market value, which renovations should you be setting your sights on?
A Word on Property Type and Location
Before getting started, it is worth noting how the ROI on any given renovation may be different from one part of the country to the next. For example, data from the Federation of Master Builders (FMB) indicates that while adding an en-suite bathroom to a bedroom in London could add around £15,000 to the property’s value, the same project in the Northeast of England would contribute £2,000.
Prior to performing any major refurbishments, consult with a reputable local construction firm for their advice and recommendations.
1. Loft and garage conversions
One of the most popular (and profitable) ways to add value to a home is to convert a garage or loft into a fully functional living space. Research suggests that while a quality loft conversion can add as much as 15% to a property’s value, a garage conversion can contribute as much as 20%.
While both projects are fairly extensive in nature, they can also be surprisingly affordable. A simple loft conversion can be conducted from around £10,000 and up, whereas a garage can be converted from as little as £5,000.
2. Energy Efficiency Improvements
Homebuyers are placing greater emphasis on energy efficiency than ever before. As a result, energy-efficient home improvements can add significant value and appeal to any type of property. Smaller projects like adding cavity wall insulation and higher-quality loft insulation can be covered with no more than around £1,000. Fitting an energy-efficient boiler coupled with a smart thermostat could attach a price closer to £3,000, while the installation of high-efficiency double glazing could cost £5,000 or more.
Either way, research from the UK government suggests that energy-efficient home improvements can contribute anything from 15% to 35% extra to a home’s value. Irrespective of the costs of the renovations, the ROI could be huge.
3. External Improvements and Landscaping
First impressions are everything when looking to get the best possible price for a property. Oftentimes, prospective buyers have made their decision long before setting foot through the door. An attractive exterior is so important that some studies suggest a well-kept garden can add up to 20% to the value of a residential property.
Landscaped gardens with private recreation spaces and plenty of decorative plants can be particularly profitable when selling a home. The installation of good garden lighting can also make a major difference, particularly when presenting your home to prospective buyers at night. Importantly, a garden that looks relatively straightforward to keep well-maintained is essential. A garden that will clearly be a full-time job to tend to is never particularly attractive.
4. Kitchen and Bathroom Upgrades
Kitchens and bathrooms tend to be scrutinised particularly heavily by prospective homebuyers. A complete kitchen refit can generate a generous ROI, but so too can simply swapping out things like worktops, cabinet doors and appliances. If it is an option, creating an open-plan living and dining space by removing an internal wall is worth considering. Some estimates suggest that while the project may cost around £5,000, it has the potential to add up to £50,000 to a home’s market value. Installing an en-suite bathroom also guarantees a decent ROI, typically up to a maximum of a 5% property value increase.