When homeowners consider a renovation project, they often would like to know the impact it will have on resale value. After all, a major project represents a fairly large investment in what may be their most valuable asset. Sure, a more desirable look and improved functionality usually represent the primary motivations for remodeling. However, homeowners also expect to recoup a sizable portion of the required funds upon the sale of a more attractive house in the future. So, what is a reasonable expectation for a return on investment? Not surprisingly, the answer depends on the location, extent, and quality of the renovation. In this blog, TriFection provides some insights related to bathroom renovation projects that may prove helpful to your decision-making process.
Bathroom Renovations Make Good Investments
Master bathrooms, along with the kitchen, receive the most regular, intense usage in a home. They serve as a very personal, intimate space. We start and finish each day in our bathroom. We seek privacy and comfort there. With features including a shower, bathtub, sinks, toilet, cabinets, lights, mirrors, etc., the infrastructure serving the bathroom is one of the most complex in the home. As such, this area drives more home value compared to most other rooms. When prospective home buyers visit a property, they often want to see the master bathroom and kitchen first. Their perceived condition of those rooms will have a huge influence on an offer.
The return on investment should not be measured solely in incremental resale dollars. You will derive intangible benefits from your enhanced enjoyment of a renovated bathroom until the point you sell the house. Those intangible benefits carry a value that cannot be quantified. As the old saying goes, “You can’t put a price on happiness.” That being said, unlike a new car purchase, a bathroom remodel represents an investment that typically results in asset appreciation over time.
Bathroom Renovation Impact on Resale Value
According to the Remodeling magazine’s 2021 Cost vs. Value report, average prices for mid-range to upscale bathroom remodels in the Greater Houston area vary between $23,000 and $71,000. This annual report is based on data compiled from a large number of local contractors, banks, and realtors. The quality and customization of materials used in a bathroom remodel determine whether a project falls in the mid-range or upscale category. Bathrooms with large custom showers, freestanding tubs, solid wood cabinetry, and granite or quartz countertops would receive an upscale designation.
The report illustrates that in recent years homeowners have recouped 55-60% of their bathroom remodeling investment through higher home value at the time of sale. Therefore, for a $50,000 project, data convey a reasonable expectation that $27,500-$30,000 would be returned in a future sale, leaving a net investment of $20,000 to $22,500. Over a 10-year period, that translates to a $2,000 annual cost or just $170 per month. If you currently have an outdated bathroom, would you be willing to pay an effective cost of $170 per month to upgrade to a better layout and nicer finishes?…. Of course, future economic conditions and inflation rates will have an impact on achieved returns, as they do on all investments. Nevertheless, when you consider a bathroom renovation project in this context, the cost may not seem as daunting.
Remodeling Quality is Key
As with many things in life, you usually get what you pay for when it comes to home improvements. If you cut corners on material quality, don’t expect to receive much credit in the form of higher resale value. And, skilled labor is not cheap, and cheap labor is not skilled….The investment returns previously cited will not hold true if you use a handyman to install a pre-fab fiberglass shower pan. Pre-fab particle board cabinets or low-end granite will not impress future homebuyers.
At TriFection, we employ only master-level craftsmen within each construction trade. We insist on using only top-quality materials from reputable vendors. As a result, our custom remodels look amazing and stand the test of time, including exceptional warranty coverage. Clients do not choose TriFection because they expect to “flip” the house and make money in the short run. Instead, they want to enjoy a dream kitchen, bathroom, living space, or room addition for at least several years. And, they want to sleep well at night knowing they entrusted their home to a company with an impeccable reputation built over 30 years. Finally, when the time comes to sell, they benefit from the custom improvements that make their house stand out in the neighborhood.
When you’re ready to upgrade your home in a high-quality manner, call TriFection at 281-548-2436. In the meantime, visit our bathroom photo gallery to discover your inspiration!