Creating value in your Home Renovation
Clients often ask for advice on what makes sense financially as they consider their home-improvement projects. Much has been written on the types of projects with the best return on investment. However, in the short term, even for those projects with the highest return, only a percentage of the investment can be recouped. A master bedroom expansion into attic space has the highest return at 73%, followed by kitchen remodels at 66% and bathrooms at 62%. On the other hand, a home office or sunroom will only return about 45%. While these statistics are helpful, there are a number of other guidelines for home renovations that we have learned over the last 20 years. We call these the “Flavin Factors”.
Don't fight the house: Renovate a home you fundamentally like. It helps to respect the house's basic design, as wholesale changes are always expensive. If your preference is for an interior with an open floor plan, find a mid-century modern house to work on, not a colonial with small rooms. Tearing out a good quality room and replacing it with one of better quality removes value before value is added back.
What’s Missing: Add value to your home by adding on missing rooms that you would appreciate and a future buyer values. Also bring substandard rooms up to par with the overall quality of the home. In the addition pictured above, we added a sunny breakfast nook to a home that already had a beautiful kitchen, but no comfortable place to eat. This is a “win-win” because it makes the home more valuable as well as being a pleasure to live in.
Avoid “Tweaking”: Small additions, like only adding a few feet to a room, are not cost-effective. A narrow addition has a higher proportion of costly exterior wall and roof area. On the other hand, adding a new room or wing makes a fundamental improvement to the house and is more economical to build.
Convert unused space: A space that is currently unused, like an attic, can be converted to usable space without the need for adding expensive “footprint” to the house. For my own house, dormers were added to the attic to make a master bedroom and bathroom addition, enhancing the homes value by adding a feature that potential buyers value.
Written by: Colin Flavin AIA