In the Pacific region for 2023, the home renovations offering the best return on investment (ROI) include HVAC Conversion | Electrification and exterior improvements such as Siding Replacement (Vinyl), Garage Door Replacement, and Entry Door Replacement (Steel). These projects boast cost recouped percentages close to or exceeding 100%, indicating that homeowners can potentially recover their entire investment, if not make a profit, upon resale. While these renovations stand out for their impressive ROI, it’s essential to note that the financial return can vary based on location, market trends, and the quality of workmanship.
Are you thinking about remodeling but don’t know which project to start with? One smart way to narrow down your options is to focus on the ones with the highest ROI, adding the maximum value to your home at the best price.
In the ever-evolving world of home renovations, understanding the return on investment (ROI) is crucial for homeowners, especially in the Pacific region, for the year 2023. This ROI, represented by the percentage of cost recouped upon resale, offers insights into which projects might be financially beneficial in the long run.
While some renovations promise potential profits upon the home’s resale, others might not yield the expected return. The following key takeaways from a recent data table provide a snapshot of various remodeling projects, shedding light on their respective costs, potential resale values, and the percentage of costs homeowners can expect to recoup.
In summary, while certain home improvement projects in the Pacific region can offer significant returns upon resale, others, especially upscale additions, might not yield a positive ROI. Homeowners should weigh the benefits of the improvement against potential resale value when considering such projects.
Given the current state of the housing market and the predictions for the coming year, now might be a good time to take on a remodeling project. “Housing is set for a slow-down,” according to Forbes. Interest rates are predicted to remain high as home appreciation drops and home sales continue to decline.
But this isn’t all bad news. A less-than-perfect time to sell your home could be the perfect time to renovate and increase its value. When the economy slows down, building materials become cheaper, and negotiations between contractors and homeowners are often tipped in the homeowner’s favor, which further drives down costs. Improvements made in a slow year can pay off when the market picks up again, and in the meantime, you earn more from a rental property or simply enjoy a more comfortable place to live.
Not all remodeling and home improvements are of equal value. It helps to know which projects offer the highest ROI and which ones give you the biggest boost in the San Diego market. Let’s take a look at some remodeling ideas, their costs, and how much of that cost can be recouped in your home’s resale value. You can find a complete report on this year’s data in Remodeling’s 2023 “Cost vs. Value” report. The recoup estimates that follow for San Diego.
The number one value of adding a bathroom is that it puts your home in a new category. Think of the difference between a two-bed, one-bath apartment and one with two beds and two baths. Therefore, these numbers are right in the title of any listing and are the first thing potential renters or buyers consider when shopping around.
Cost Recouped: 29.8%
Add a 6×8-foot bathroom with poured concrete walls. Includes a fiberglass tub/ shower, a low-profile toilet, ceramic tile floors, and modern lighting, wiring, and fixtures.
Cost Recouped: 25.4%
Beyond functional, a luxurious 100-square-foot master bath is connected to the main bedroom. Two sinks, a freestanding tub, and a separate shower. Electric floor heating and custom cabinetry.
Cost Recouped: 62.5%
This project entails remodeling a bathroom that is 5×7 and adding a porcelain-on-steel tub. Modern shower fixtures and lighting. Ceramic floor and vinyl wallpaper.
Cost Recouped: 32.5%
Besides installing new fixtures and amenities like a recessed shower caddy, an upscale bathroom remodel involves expanding an existing bathroom by nearly two-thirds.
Cost Recouped: 43.3%
A universally designed bathroom remodel of a 5×7 bathroom that would include wheelchair accessibility, flat-panel electric switches, and 250-pound towel racks. Even though towels don’t weigh that much, it’s nice to know your towel racks won’t come loose any time soon.
Here in California, you’ll find a lot of kitchens that were state-of-the-art back in the 60s and 70s. Updating your kitchen comes with a significant ROI and increases energy efficiency.
Cost Recouped: 79.2%
As you might gather from the high recoup percentage, a little bit goes a long way when it comes to a few simple updates to bring a functional but dated kitchen into this century with new, energy-efficient appliances and some simple cosmetic changes, like new cabinets, trim, and paint. Remodeling your kitchen actually has a higher ROI than upgrading an already up-to-date kitchen with nicer features.
Cost Recouped: 38.8%
A major midrange kitchen remodel goes beyond aesthetics and appliances with features like custom cabinets, an island, custom lighting, a dishwasher, and a vented range hood.
Cost Recouped: 27.5%
As with cooking, what sets a good kitchen apart from great is often the little details, details as task lighting and top-of-the-line cabinets, a glass-tile backsplash, and undercabinet lighting.
As with bathroom addition, adding a master suite is a game changer that appears right in your listing. It’s also a big comfort upgrade.
Cost Recouped: 26.5%
A 24×16-foot master bedroom suite featuring a walk-in closet and well-appointed bathroom.
Cost Recouped: 19.9%
An upscale master suite addition is more like adding a separate apartment. Features include a sitting area, gas fireplace, and French doors.
Adding a deck is like increasing the square footage of your house, and it’s hard to find a place where you’d get more year-round use out of one than in San Diego.
Cost Recouped: 36.7%
Composite decking is more expensive upfront but has lower upkeep costs over time.
Cost Recouped: 52.3%
Classic, rugged, and beautiful. Wood is cheaper to install and arguably more aesthetically pleasing.
Cost Recouped: 104.8%
This is like adding an outdoor living room that’s usable year-round in San Diego. Features include a firepit for chilly nights and an awning for sunny days.
This project involves converting a 2,000-square-foot home from a fossil-fuel-burning furnace to an electric heat pump. The process includes:
A quick and simple fix that can transform the look of your home and save you money on energy bills.
Cost Recouped: 88.7%
A steel door prevents leaks and keeps your home insulated. It’s also a home security upgrade. Since a door is only as strong as its weakest point, steel door installation includes an upgraded frame and locks.
An upgraded grand entrance is an investment in your home’s first impression.
Cost Recouped: 49.7%
This is a job that can be completed in one day and last for the life of your home.
Cost Recouped: 96.8%
Replacing your garage door has the highest ROI of any remodeling project. Nothing does more to instantly boost your home’s curb appeal, energy efficiency, and security.
From an insulation point of view, windows and doors are basically holes in your house. Installing the right ones can translate to big savings on your energy bill.
Cost Recouped: 68.2%
Energy saving is designed to match your home’s current trim.
Cost Recouped: 57.8%
Also, energy saving but with a hardwood trim interior. This is the higher-end option.
Cost Recouped: 98.3%
Improving siding is more than a matter of looks and curb appeal. It’s an investment in the durability of your home, protecting you from moisture, termites, and other potentially expensive hazards.
Cost Recouped: 86.9%
Replace 1,250 square feet of existing siding with new fiber-cement siding, factory primed and factory painted. Include all 4/4 and 5/4 trim using either fiber-cement boards or cellular PVC.
Cost Recouped: 84.6%
This is yet another project that instantly boosts curb appeal and makes your home a more inviting place to return to. The stone veneer looks the same as the pricier options and puts less stress on your foundation than real stone.
When the time comes to replace a roof, upgrading can mean peace of mind for years to come.
Cost Recouped: 61.3%
Roofing tends to come with long warranties because roofs are meant to last for decades. Whether you decide to take on a roofing project will depend on the current state of your roof.
Cost Recouped: 43.4%
This option would also include skylights and an ice barrier–not that you need that in San Diego. It’s worth remembering that not only is the material metal roofing more expensive per square foot than asphalt shingles, but it also requires more skilled and specialized labor, which comes at a premium.
Start your remodeling project today! Call us, and we can help you decide the best-valued project for your goals.
The renovations offering the best ROI in the Pacific region for 2023 include HVAC Conversion | Electrification, and exterior improvements like Siding Replacement (Vinyl), Garage Door Replacement, and Entry Door Replacement (Steel). These projects have cost-recouped percentages close to or exceeding 100%.
HVAC Conversion | Electrification provides the highest ROI, with a cost recouped of up to 104.8%, meaning homeowners can potentially earn back more than they spent on the project upon resale.
The ROI for upscale kitchen remodels tends to be lower. For instance, a Major Kitchen Remodel | Upscale offers a return as low as 27.5%.
The ROI for a Garage Door Replacement is 96.8%, indicating it offers one of the highest returns among home improvement projects.
Given predictions of a housing market slowdown, now might be an opportune time to renovate and increase home value. Building materials may become cheaper in a slowing economy, and negotiations between contractors and homeowners could be more favorable, leading to lower costs. Improvements made during such times can provide significant returns when the market rebounds.
Kimberly Villa is a recognized expert in the Home Design and Remodeling industry. Her passion for the industry is matched only by her love for sharing insights, new trends, and design ideas. Kimberly’s expertise and enthusiasm shine through in her contributions to the Kaminskiy Design and Remodeling website blog, where she regularly shares valuable information with readers.
