Where you’ll make the most
Considering a little remodel? If you want the most bang for your buck, you may want to focus on the kitchen and bathroom only. According to new data, that’s where the home’s highest-ROI renovation projects lie.
According to the latest Houzz and Home Survey, the kitchen and bathrooms hold the most potential ROI when it comes to renovation projects.
Kitchen renovations come with an 83 percent ROI, on average, while the master bathroom boasts an ROI of 81 percent. Guest bathrooms are slightly lower at 76 percent.
Renovation projects that don’t deliver great ROI? The survey shows lawn upgrades, core systems renovations and exterior feature projects bring in the least cash. Lawns/beds/borders offer just a 48 percent ROI, according to the survey.
What homeowners are spending
How much are homeowners spending on those high-ROI projects? According to the survey, the average kitchen remodel was about $11,000 last year.
On “major” remodels — which include the replacement of cabinets and appliances — the average spend was $20,000 to $33,000 depending on the size of the room.
In the bathroom, the average homeowner spent about $7,000 in renovations last year. Major remodels ranged from $10,000 to $16,000.
A HELOC warning
Homeowners considering a HELOC to pay for these types of renovation projects should exercise caution. A recent survey by TD Bank revealed that just 23 percent of homeowners had a financial plan to handle the end of their HELOC draw period.
Mike Kinane, TD Bank’s senior vice president of consumer lending, said it’s important that homeowners work with their lender to fully understand the terms of their HELOC — as well as be prepared for the future.
“Talking to a lender from the beginning can help homeowners determine the best course of action based on their current and future financial situations, to avoid surprises down the road,” Kinane said.
Get today’s mortgage rates
Considering a home equity loan or HELOC to cover those renovation projects? Then shop around and see what mortgage rates you qualify for today.