In real estate investing, the name of the game is maximizing profit. That means deploying scarce capital as efficiently as possible.
Smart real estate investors will focus on renovations with the biggest impact on After-Repair-Value (ARV). But how do you identify the improvements with the highest return on investment (ROI)?
Read on…
In this blog post, we'll take a look at the latest data from the 2024 Cost vs. Value Report by Remodeling Magazine. We'll highlight the projects that give investors and homeowners, for that matter, the biggest bang for their buck so that you can make smart investment decisions.
Curb Appeal For The Win
The top four projects with the highest ROI are all exterior upgrades. You know what they say about first impressions. It pays to put some money into what a buyer sees when they first roll up to the house.
- Garage door replacement and exterior steel door replacement are two of the top projects in terms of ROI this year. These relatively inexpensive projects can add significant value to your home's curb appeal and functionality.
- Incorporating some stone into the home’s design seems to pay off well in the end with a 153% bump in value.
- Upgrading the home’s entrance or completing a minor kitchen remodel won’t necessarily recoup all of your costs but it’s pretty close.
- Interestingly, a major kitchen remodel to include new cabinetry has a much lower ROI – only 38% so be judicious with your upgrades.
Consider Your Market
The chart above reflects national averages but ROI can vary widely across the country. The Pacific region offers the highest returns, followed by New England. So it pays to consider the location of your investment property. And in today's market, where construction costs are on the rise, it's more important than ever to be strategic about your renovations.
Navigator Private Capital can help you make smart investment decisions about your real estate portfolio. We have a team of experienced professionals who can help you assess the potential value of different renovation projects and develop a plan to maximize your ROI.
Happy To Help
Reach out to your loan officer or call 888.444.3160 to be put in touch. Want a quick quote? Click the link below and get our best pricing for your next project.