What is your ROI?
Real estate renovation costs in Minnesota have increased significantly over the past five years due to the high cost of building materials and labor shortages. According to the Remodeling 2022 Cost vs. Value Report, a mid-range bathroom remodel has increased by 31.3% since 2017, while a mid-range kitchen remodel has increased by 23.3%. This trend can affect home prices, taxes, insurance, and rent costs, as buyers may be willing to pay more for a recently renovated property. Homeowners may face higher property taxes, while renters may experience increased rental costs. It is crucial for those involved in real estate to remain informed about renovation cost trends and to also compare that to their possible ROI: Return on Investments.
There were a handful of key trends from 2022 in the report that are worth noting for any homeowners looking to renovate. The overall ROI for home improvement projects has increased compared to previous years, with an average return of 63.1% on all projects. Some major renovation projects also included outdoor living spaces, such as decks, patios, and landscaping with an average of 63.9% return. Kitchen and bathrooms have remained popular and still provide a solid return on investment with an average of 58.1% and 54.6% respectively. If you looking to add additional rooms and do full-scale renovations, that has decreased compared to previous years, sitting roughly at 54.9% and 56.5%. Lastly, one other good and up and coming popular ROI projects would be energy-efficient additions such as insulation, replacing windows, and upgrading HVAC systems.
Considering the 2022 Cost vs. Value report it suggests that homeowners focus on outdoor living spaces, kitchens and bathroom remodels, and energy-efficient upgrades to get the best return on their investment.
Cost vs. value 2022 | national | remodeling (2020) Remodeling by JLC. Available at: https://www.remodeling.hw.net/cost-vs-value/2022/ (Accessed: March 23, 2023).
Minnesota Homebuyer’s connection (2022) Minnesota Homebuyer’s Connection. Available at: https://mnhomebuyersconnection.com/ (Accessed: March 24, 2023).