Unlike flipping a house, which is evaluated purely by investment and return, renovating a home can not be judged solely by how much the property value increases. For example, in Remodeling Magazine’s “Cost vs. Value Report 2020”, the average ROI on a minor kitchen remodel in Virginia Beach is 58.6% (81.1% for the national average), and on a major kitchen remodel in Virginia Beach is only 44.3% (53.9% for national). Of all the spaces in the house, the kitchen is already one of the highest return items in a home renovation. Besides the ROI, additional important factors our clients often consider is how the renovation can cater to their needs, improve their quality of life and support their lifestyle. Those factors are often not considered when flipping a house.
Of course, there needs to be a balance between the investment and the return in both monetary value and in the value to the quality of life. To help figure things out, we’ve put together some questions to ask yourself along with a few key factors to consider below:
- What do you love about this house? Will finding a new dream home be an easier alternative? Also consider that more often than not, the new house you find will need some kind of updating as well. Creating a spreadsheet will help you calculate all the related costs and generate a bigger picture.
- How long do you intend to be living in this house? Could this be an aging-in-place house? The longer you live in the house, the more it makes sense to invest for your own benefit. 4 to 5 years may be a good threshold between minor or major renovation.
- What are the other property values in the neighborhood? Will your targeted property value exceed the property value ceiling of the neighborhood? Evaluating whether your improved property value can achieve what you expect is an important factor. If you were to find that your investment could not reach your market value goal, you may also still consider moving forward with it if it can add greater value to the quality of life you are looking for.
- Improving the quality of life typically has a greater value than most people give it credit for. It profoundly affects the wellness of yourself and your family. Do this: Create a priority list for your renovation wants and needs. Next, mark which ones will improve your quality of life the most and make you happier in your daily life? Finally, use that list to set your budget that will highlight and concentrate on those high priority items.
- When you consider the area you live in, what seem to be the most popular features of the homes people are looking for or talking about? Some examples could be integrating interior/exterior living areas, developing universal design features that support aging in place, or building a new in-law suite addition? Those features can not only increase the value in quality of life , but also increase the property value and potentially help to get more offers when/if you decide to sell the house.