If you plan to sell your home sometime in the future, you may approach a remodeling project wondering what kind of return on investment you could get. It’s only natural to want to know what changes make the most sense financially, especially when the upfront costs are significant.
Cowie Construction are your local Lower Mainland Bathroom Renovation Experts!
The exact Return on Investment “ROI” you will see on your place depends on a variety of factors, such as how the real estate market is doing in your neighborhood at the time of the listing and how the rest of your home compares to other places sprouting “For Sale” signs in the area.
A bathroom renovation, for instance, is one of the best indoor remodels that can pay off when it comes time to sell. Most properties with renovated bathrooms sell for a higher price and faster than homes that require major updates.
According to Zillow data, bathroom remodels yield the biggest returns in terms of boosting your home’s resale value. For minor cosmetic changes, you’ll see a $1.71 increase in home value for every $1 you spend. This includes things like painting and refinishing cabinets, swapping out the mirror, or upgrading hardware.
So, even if you only have the time and budget to make small improvements, focusing on bathrooms is usually a smart move that will yield a good ROI value.
Bathroom renovation ROI to expect
There are many approaches and data to predict the kind of ROI you can expect. The most accurate business model up to date is that of Zillow. According to Zillow bathroom ROI can vary based on various things including the type of renovation effort and the level of finishes from Remodeling magazine’s Cost vs. Value Report. They divided the type of renovation done to the bathroom into categories:
- Standard: Significant changes are requiring the replacement of some items, not just aesthetics like lighting and paint.
- Midrange: Nice but not luxury finishes, like new tile surrounds and floors, chrome fixtures, solid surface counter, standard toilet, and single-lever shower handle.
- Upscale: Think luxury, like heated floors, stone countertops, double sinks, expanded or optimized layout, top-of-the-line lighting and fixtures, rain showerheads, roll-in showers, and freestanding soaker tubs.
- Universal design: With the focus on accessibility and the growing popularity of aging in place homes, universal design is becoming more commonplace and desirable. It can include wider doorways and more room between fixtures, lower vanities with room for a wheelchair, roll-in shower access, a taller toilet, shower seating, and more.
- Addition: Adding a new bathroom can significantly add value to your home, particularly when the bedroom to bathroom ratio is significantly off.
Now that you have known the categories of bathroom renovations, what is the predicted ROI for each of them?
According to Cornerstone Home Lending, with an average spend for a standard remodel of between $15,730 and $18,546, you can expect a return on investment of anywhere from 64.8% to 68.4%.
The national average bath remodel ROI is 70.1%. That’s based on an average cost of $19,134, with an average return of $13,422.
With an average cost of $61,662, the average return for an upscale bathroom remodel comes in at $34,644, or 56.2%.
The average ROI on a universal design renovation for a bathroom is an impressive 70.6%, based on a cost of $16,393 and a return of $11,581.
Just like bathroom renovations vary by size and finish, so do the additions. The ROI you can expect from a midrange addition could be up to almost 60%, while the upscale addition comes in at almost 55%.
Updated bathrooms are a favorite for buyers
Real estate agents know from experience that renovated bathrooms can make your home stand out and attract buyers, while old, dated fixtures can reduce its appeal.
“Now, more than ever, buyers are looking for renovated apartments,” says Mark D. Friedman, an associate broker with The Friedman-Rosenthal Team at Halstead Manhattan, LLC. “Money is tight even when buying an apartment for $1 million so buyers don’t want to do work. A renovated bathroom will always make the home sell faster and for more.
Fiona Dogan, an agent with Julia B. Fee Sotheby’s International Realty in Rye, New York, concurred. “Bathrooms are a ‘money room’ in a house. An unrenovated bathroom can be a deal-breaker for buyers,” she says. “Today’s buyers don’t want to deal with the expense or the hassle of designing, ordering materials, and constructing a new bathroom. HGTV and Instagram have conditioned them to expect picture-perfect homes.”
In her experience, the ROI on renovating a bathroom has been close to 100%.
“When it comes to budget, consider making improvements that are in line with the value of the home,” she added. It’s also important to match the renovation to the expectations of people buying in your neighborhood. Working with a professional design-build team like Cowie Construction is a great way to get expert advice, choose the right grade of materials, and ensure your renovation will appeal to the greatest number of buyers in your area.
Contact us with any questions you might have about your next bathroom renovation project. We are always happy to help.