The conclusion is one I knew. Renovate for yourself, not for investment purposes. I improve my house based on equity increase matching the cost and not more.
Wow. There is no reason whatsoever to spend money to fix up your house before selling. Good to know.
I think it should be noted what kind of home renovation. Investing in updating kitchen and bathrooms has a bigger ROI than replacing carpet. Not all renovations are equal in terms of ROI.
So what you’re saying is, house flippers are ruining the starter home market for nothing.
Places with housing shortages get more value for a renovation as most homes will be older so updated ones stand out with less competition with modern amenities from new builds.
Places where they build homes get less value from renovations because if a home doesn’t meet your needs you can just build one that does. No need for a home addition and if you want an updated kitchen you can just build a custom home to get it.
It really depends on the house you’re renovating and what you’re doing. I bought a house in 2017 for $180,000 and put $30,000 dollars into it and then had it valued by may bank (to stop paying PMI after putting 10% down) at $240,000. I got roughly $2 in value increase for every $1 spent on renovation.
I get that taking an otherwise retail-ready home and spending $10,000 on a kitchen may not have the same effect, but I also don’t love how an “average” like this obscures the fact that buying an ugly house and investing in it can yield great returns. It disappoints me that part of why house flipping is so profitable is that people only want to buy “retail ready”. It’s hard work / stressful, and having the funds and time to make it work are a luxury I was lucky to have, but I think it’s important for people to know it’s possible to get a significant positive return on renovating a house that lacks curb appeal.
Funny, every single time I’ve made a home improvement I’ve been told “oh this is one of those ones that doesn’t actually increase the value of your home, it’s just expected maintenance”
New kitchen stuff, new hvac, new paint, landscaping, plumbing, solar, on and on
I don’t like it. I can get more than that by renovating wisely, doing the work myself, selecting good materials, shopping around.
I understand it’s just a general baseline, but it’s a poor one. There are just too many factors to generalize it this far. What improvement? What was the state of the room before the improvement? Did I get a discount? How much did I spend on hiring contractors vs doing it myself? Does this count added cost of related but necessary repair?
I’d also like to see a state-by-state chart of how much your home value increases for every hour spent sitting on your ass and doing nothing.
(I expect it to be significantly more than a dollar.)
Our last house we renovated three bathrooms, hall floor tile, laundry room, and master walk in closet. We did it not to sell but for our own needs and desires. When we sold the house the only updates we did was to repaint two rooms. We were able to enjoy our renovations for 10yrs.
I wouldn’t recommend adding a pool!
Misleading. You could change this chart to be “price per square foot of land” and it would be the same color coding. Like… if the land is $1,000,000 and the structure is $200,000 and you renovate something, of course you’ll preserve the value of the home because the value is all land to begin with.
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Hawaii you can damn near renovate for free
The conclusion is one I knew. Renovate for yourself, not for investment purposes. I improve my house based on equity increase matching the cost and not more.
Wow. There is no reason whatsoever to spend money to fix up your house before selling. Good to know.
I think it should be noted what kind of home renovation. Investing in updating kitchen and bathrooms has a bigger ROI than replacing carpet. Not all renovations are equal in terms of ROI.
So what you’re saying is, house flippers are ruining the starter home market for nothing.
Places with housing shortages get more value for a renovation as most homes will be older so updated ones stand out with less competition with modern amenities from new builds.
Places where they build homes get less value from renovations because if a home doesn’t meet your needs you can just build one that does. No need for a home addition and if you want an updated kitchen you can just build a custom home to get it.
It really depends on the house you’re renovating and what you’re doing. I bought a house in 2017 for $180,000 and put $30,000 dollars into it and then had it valued by may bank (to stop paying PMI after putting 10% down) at $240,000. I got roughly $2 in value increase for every $1 spent on renovation.
I get that taking an otherwise retail-ready home and spending $10,000 on a kitchen may not have the same effect, but I also don’t love how an “average” like this obscures the fact that buying an ugly house and investing in it can yield great returns. It disappoints me that part of why house flipping is so profitable is that people only want to buy “retail ready”. It’s hard work / stressful, and having the funds and time to make it work are a luxury I was lucky to have, but I think it’s important for people to know it’s possible to get a significant positive return on renovating a house that lacks curb appeal.
Funny, every single time I’ve made a home improvement I’ve been told “oh this is one of those ones that doesn’t actually increase the value of your home, it’s just expected maintenance”
New kitchen stuff, new hvac, new paint, landscaping, plumbing, solar, on and on
I don’t like it. I can get more than that by renovating wisely, doing the work myself, selecting good materials, shopping around.
I understand it’s just a general baseline, but it’s a poor one. There are just too many factors to generalize it this far. What improvement? What was the state of the room before the improvement? Did I get a discount? How much did I spend on hiring contractors vs doing it myself? Does this count added cost of related but necessary repair?
I’d also like to see a state-by-state chart of how much your home value increases for every hour spent sitting on your ass and doing nothing.
(I expect it to be significantly more than a dollar.)
Our last house we renovated three bathrooms, hall floor tile, laundry room, and master walk in closet. We did it not to sell but for our own needs and desires. When we sold the house the only updates we did was to repaint two rooms. We were able to enjoy our renovations for 10yrs.
I wouldn’t recommend adding a pool!
Misleading. You could change this chart to be “price per square foot of land” and it would be the same color coding. Like… if the land is $1,000,000 and the structure is $200,000 and you renovate something, of course you’ll preserve the value of the home because the value is all land to begin with.