The most profitable home improvement a homeowner can make to increase resale value isn’t as swanky as a kitchen with marble counters and stainless-steel appliances, as practical as a dedicated home office, or as fun as a backyard pool or hot tub.
Instead, the work that pays off the most is refinishing or replacing the home’s timber floors. When homeowners sell their homes, they recoup approximately 118%-147% of their investment in new or refinished wood flooring.
Timber flooring looks beautiful in photos, and more people are relying on technology to search for homes these days. Wood flooring is also far more hygienic than carpeting in the home, and parents and pet owners prefer hardwood floors because they are easier to clean.
As the COVID-19 pandemic set in and the great renovation boom arrived, NZ residents spent $1.8B* on their homes in 2021 undergoing its biggest renovation period in history as home improvement activity hit an all-time high. While the majority of those projects would have occurred regardless of the pandemic confining people to their homes, many homeowners became more ambitious and completed larger projects as a result. Or, once they began renovating, their home improvement plans expanded to include other areas of the house.
People remodelled their homes to improve the surfaces, finishes, and materials, as well as to add features that could improve liveability. The majority were pleased with the outcome, and more than half would not change a thing.
During the pandemic people got bored with their living spaces. If you spend nearly 24 hours a day at home, having a newly renovated home brings a lot of happiness.
Homeowners who spend an estimated $5,000 on refinishing their hardwood floors could earn about $7,300 in resale value if they put their homes on the market. And homeowners who spend an estimated $15,000 on new wood flooring could earn $18,200 in resale value.
Other home renovation projects like insulation upgrades, replacing the roof, and garages doors typically break even.
Because many people spent more time indoors with their families during the pandemic, increasing the square footage of their homes was also popular. However, homeowners typically spend more on this additional space than they recoup when they sell their homes.
Converting attached garages into additional living spaces, installing new closets, and converting attics into more living space are the next most profitable projects. While people can lose some money on them, they can have some of the highest cost recovery rates.
Bathroom and kitchen upgrades, as well as the addition of new bathrooms and primary bedroom suites, are also among the projects that add the most value.
However, adding the extra space does not always result in a value increase equal to the cost of the work. Adding a new primary bedroom suite could cost you about $126,000** but could result in only a $75,000 increase in resale value for homeowners. A new kitchen could cost upwards of $32,000 but addd only about $24,000 to the value.
** Estimate Value from Ray white “The average renovation approved was $126,000.”
What’s important to remember is a lot of homeowners do renovations for their own benefit, and it can be very personal in how they would remodel and the finishes they would choose.
All numbers throughout this document are indicative only unless stated. Please get in touch with our team if you have any questions or would like to explore some of our timber flooring options.
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