It is unspoken, common knowledge that baths and kitchens are the main selling points of any home; these are also most often one of the costliest components when it comes to pursuing home improvement. Given the right choices over design and materials, however, any home would be worth the effort once it comes to presentation for potential buyers or even just for the purpose of adding significant enhancements to your living space. Independent effort or not, the ideas you may gain from here might even make for special do-it-yourself (DIY) projects.
Kitchens and baths, time and time again, conquer the ranks of interior home improvement projects which would appeal most to their potential buyers, as confirmed by a study done by the National Association of Realtors (NAR): they rated these according to the percentages that can be recovered from each of the projects’ remodeling costs, determining the remodeled homes’ resale value after they were developed.
The following ideas for home improvements will likely provide you with the most suitable options that will give you your money’s worth, especially for the returns on investments (ROI).
1. Fully Renovating Your Kitchen
This project amounts to about $68,000, according to the National Association of the Remodeling Industry’s (NARI) cost estimation. The returns? As said by NARI, the estimated cost that can be recovered amounts to up to $40,000, with the project’s recovered value percentage reaching 59%.
Fully renovating your kitchen might just increase your home’s value as a whole, if done right.
Its design and overall demeanor paint the picture of how well-kept and maintained the house has been kept by its homeowners, and because of that, prospective buyers may immediately cross off their lists those that failed to meet their standards.
To give you an example, what is prevalent and still remains on many possible buyers’ checklists includes the presence of smart but conveniently easy to clean features. These features are things like granite countertops and stainless steel appliances; a target of those especially looking to immediately move in and start entertaining and hosting guests.
The reason why you should precisely renovate your home’s kitchen area is to revamp any well-worn surfaces and their finishes, as well as refurbish any ragged materials, 24% of surveyed homeowners agree with this topmost common cause.
Furthermore, the Remodeling Impact Report elaborates on the fact that 10% of realtors agree that having completely renovated kitchens in their showcased houses has been recently aiding them in shaking hands over deals and successfully closing off sales.
2. Upgrading Your Kitchen
For upgrading your kitchen, NARI estimates that costs for this project may amount to $38,300, while NAR estimates that out of this project the costs recovered could be around $20,000, totaling 52% in the percentage of value that may be recovered in doing this project.
Instead of completely reconstructing an entire kitchen, a lower-cost possible course of action may be opting to upgrade it instead to the latest styles in design.
Upgrading a kitchen instead of completely remodeling it garnered 57% more favorably than the 12% that decided on changing it out entirely, and upgrading your kitchen might help you swiftly seal a deal, such as the 20% of realtors that attest to kitchen upgrades assisting them in closing their own deals.
You could upgrade it by focusing on a couple of things that may need immediate attention the most, from swapping any of your outdated appliances with new ones, restoring the finishing on your kitchen’s worn-out cabinets, to changing out the sinks’ tiled backsplashes; anything that goes well within your budget while still effectively refreshing your set up, making it appeal more to your targeted buyers.
Not only does upgrading your kitchen boost your home’s resale value, but in itself, taking steps forward in improving your kitchen helps you on how you enjoy living in your home, just as 29% of survey respondents say that the most important result of their kitchen’s remodeling is it’s noticeably refined functionality and habitability.
3. Renovating Your Bathroom
Renovating your bathroom may cost up to $35,000, according to NARI’s cost estimation. To recover the costs and make it worthwhile on the other hand, NAR estimated around $20,000. Doing this project can raise your home’s recoverable value percentage up to 57%.
The cost that burdens pockets and the amount of work it takes when it comes to the task of remodeling old, fixer-upper bathrooms can make anyone hesitate, and you wouldn’t want any of your prospective buyers to flee your home just by the sight of your bathroom.
As they say, a bathroom is one of the most prominent places where it shows how well a home can possibly be maintained by its homeowner; that is why completing a bathroom renovation may help you, as one of the many factors to be taken into consideration, once you put your house up for sale.
This is a crucial fact to remember, but there is still an option to contemplate as while 33% of realtors suggest that sellers complete bathroom renovations before completing a sale, only about 4% have stated that this project recently helped them seal the deal.
4. Renewing your Bathroom
For this project, it may cost you around $60,000 as estimated by NARI. NAR, meanwhile, estimates that you may recover around half of your spent costs, around $30,000, amounting to a percentage of 50% value recovered from doing this project.
Although much less significant, with only about 5% of realtors advising sellers to add a new bathroom and with about 1% saying that this project helped them secure the deal, this project would make much more sense for homeowners that have no plans on moving out of their house for the next several years.
As this remodeling decision is mainly for the purpose of increasing function more than simply modernizing bathroom features, this is as costly as remodeling the entire kitchen but significantly lesser in importance if you mainly plan on impressing your potential buyers.
Leasing your home on platforms like Airbnb, however, may make this addition not just an extra feature.
An enhancement such as this may help you generate more profit through attracting renters with set preferences, and with this you can even go as far as to be able to cater to several renters at once, taking advantage of having extra, available amenities.
5. Making a New Master Suite/ Owners’ Suite
This project’s cost, as estimated by NARI, amounts to $150,000 when carried through, with about $75,000 of the cost recoverable, according to the estimations by NAR. Overall, the percentage of recoverable value from this project goes up to 50%.
This is a project that may accommodate you, the homeowner, more than just simply making this an additional honey pot attraction for future buyers.
It is this list’s most highly-priced project, but this may give greater value to you as you continue to live in your home: 65% of respondents attest to the fact that they look forward more and more to going home ever since they have completed this project, although only 3% of realtors have suggested that projects such as these should be completed before attempts of sale.
So far, lesser than 1% say that this project had recently helped them establish a deal.
If you still have not made up your mind about where you are going to focus your budget for your home improvement, make a list of the factors that you are going to take into consideration for each project.
On that note, be sure to not spare a single detail, down to the possible impacts on your home insurance.
Securing Your Investment
You have updated your house with a bedroom, added a bathroom, and maybe even converted your basement into a living room or simply another area for lounging. You have now invested quite a significant amount of money, time, and effort into improving your house to your satisfaction… and you feel great!
You remembered that you already have your original home insurance coverage — which promises protection on the interior and exterior damage in your home. With the upgrades, you have recently added to your property plus the new furniture and fixtures – you now wonder whether your liability limit is still enough coverage.
Your Home Insurance Coverage
You might have had home insurance previously, but certain improvements with your property can make your coverage insufficient, thus, could make you ill-protected. On the positive end, such upgrades may also prompt lower premiums, and could give you savings which could really help your bottom line.
Then again, whether you are still in the planning stage of making that home improvement or already in the process of doing it, here are some protocols which you should be diligent with:
- Consider the process
First Things First
Consider the reason why you are upgrading — most probably not just for comfort’s sake but also as a means to increase the value of your property. So best to talk to your insurer first, so they can advise you on how to protect you financially along with your assets from start until the completion of the project.
“Course of Action” or Builder’s Risk Policy
If you’re getting a significant upgrade or home improvement, it is best to confirm with your contractor or builder if they have this coverage. This is to ensure that you are protected from possible damage like rain, wind, theft of construction materials, etc while the renovation is in progress.
Contractor’s Insurance Policy
As construction workers will be doing the renovation of your property, the company that will handle the job must have workers’ compensation and an insurance policy with commercial business/general liability insurance. This is to ensure that in case of injury during the renovation among their workers, you will be freed from any liability.
Vacant Home Policy for Major Renovations
Major renovations like ceiling-wall-flooring replacements or room extensions would often require the homeowners to vacate the place while construction is ongoing. To protect your home while you are away, make sure that you get vacant home insurance to make sure that your house remains covered even while you’re out.
The event of easy-to-use tools coupled with DIY instructions online has paved the way for an increase in people braving do-it-yourselves projects to cut costs. The trade-off of getting a professional to do it for you aside from savings is the satisfaction of actually doing it and seeing it done. However, potential injuries could also occur. Sufficient liability coverages will ensure that medical costs will be taken care of – including potential lawsuits in case the not-so-handy man you might have tapped to help gets injured on the job.
Whether doing it on your own or hiring someone to do the renovations for you, keeping your receipts and making proper documentation like taking pictures is essential in monitoring the progress of your project.
2. Updating your coverage
Making those changes in your house entailed costs and you have supported this with the documentation you prepared while the renovation is taking place. Your previous insurance coverage is already inadequate and it is now time for an upgrade to match the new value of your “new” home.
3. Liability Protection Upgrade
In case you have decided to upgrade your home with amenities like a swimming pool, jacuzzi, or playground, then an upgrade to your home insurance is also a must. This is because these amenities are also likely to attract accidents or injuries, especially with visitors – and can put you in trouble.
4. Personal Possession Coverage
You want an upgrade to your house and this includes extra furniture and fixtures here and there. Most of these may not necessarily be cheap. Getting additional coverage to protect these valuables will ensure that these possessions are the next logical thing to do.
5. Coverage for Construction Material and Foundation Collapse
Accidents can happen even to the most conscientious person. This additional coverage will protect you from possible loss or damage to the construction materials to be used during the renovation – whether those are still on the way to your place or already sitting within the vicinity of the place.
The foundation collapse coverage on the other hand will protect the property from unforeseen damage while the work is being done. An example of this is the sudden collapse of the upper floor during the renovation. Having this policy added to your original home insurance before the work starts will ensure potential loss will also be averted.
Considering the figures cited by the National Association of Realtors, the above-mentioned home improvement projects may provide the biggest Return on Investment (ROI).
However, it is also true that upgrading your home insurance coverage is imperative due to the following reasons:
Potential discounts on insurance premiums.
- Upgrades to your house like with the electrical, plumbing, heating systems minimize the risk of potential damages to your property.
- Adding safety measures on your property like fire and burglar alarms, smoke detectors, and even dead-bolt locks on doors. Other potential sources of discounts include a new roof especially if you live in a hurricane or hail-prone area. A newer roof is likely to get higher coverage than an old one because the former will cost more when replaced than the latter.
The need for a home office.
The COVID-19 pandemic has caused a lot of people to consider telecommuting worldwide. Working from home to remain safe and earning has now become a norm. Converting rooms for home offices has likewise prompted renovations. Now, having your office in your home may also put you at risk of insufficient coverage, even if you have one. To remain operational even in your own home, you will also have to think about transferring supplies, equipment, and/or machinery right to where you are.
Investing in home improvement projects to not only increase the value of your property but use it to generate additional income is wise. Getting a home insurance policy is wiser – just make sure you have enough home insurance to cover the renovation. Otherwise, the wisest still, whether the renovation is already ongoing or still on the drawing board, is choosing to upgrade your home insurance policy with supplemental coverage to protect your investment.
Remember: “You can never be too prepared.”
Call us now, and we will provide you with the information and coverage that will suit you best.