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Focus on Kitchens and Bathrooms to Maximize ROI

When looking at home upgrades, every real estate investor is trying to find the optimal balance between cost and ROI. When considering your options for interior improvements, two of the first rooms you should look at are the kitchen and bathroom.

According to Remodeling’s 2015 Cost vs. Value Report, minor kitchen remodels yield a 79 percent return on investment, the best of any room in the house. Bathrooms also yield a strong return of 70 percent.

Updating a kitchen can range from small tweaks to a complete overhaul. For a smaller remodel, focus on simple tasks like changing the paint on the walls and cabinets. Choose a neutral color to avoid turning off potential buyers with something too specific or intense.

If the kitchen needs a full remodel, take care to invest in the right upgrades to improve the bottom line. Generally speaking, you can spend between six and 10 percent of the total home value and position yourself to get fair returns.

As for key upgrades to make in these rooms, hopefully this quick list confirms what you’re already doing:

  1. Countertops are a great place to invest both in the kitchen and bathroom. Granite is still one of the most popular materials / looks. It costs a bit more up front, but one way to save is by avoiding high-end or exotic colors, veins and patterns. To many customers or potential buyers, granite is granite.
  2. Cabinets are also a great place to add value to a home. There are plenty of ways to update and upgrade cabinets without completely replacing them. Add features and amenities like new hinges and soft-close doors / drawers. You can also paint or reface the cabinets with a new, stylish veneer. Finally, look into replacing the knobs to make the cabinets look more modern.
  3. Appliances have the potential to make or break a kitchen, especially for prospective homebuyers. They can also be one of your biggest investments, depending on the extent of your remodel. Like granite for countertops, stainless steel is still popular for major appliances. Whenever you can, look for suites rather than individual appliances. Not only will this give the kitchen a uniform look, but it can mean significant savings on the unit price for each appliance included.  When it comes to bathrooms, simple changes can make a big difference. If the bathroom is in pretty good shape, consider cost-effective updates.
  4. A new paint job can completely transform a room. Creating a spa-like bathroom was one of the biggest trends for 2015, according to National Kitchen and Bath Association. You can easily create that look by refreshing paint to a pastel, such as secret blush or dreamscape gray. If you want to focus more on savings than color choice, look to the BEHR PRO™ line of commercial paints.
  5. Fixtures like toilets, faucets and showerheads can give the bathroom an updated look without a huge investment. For instance, updating the showerhead with a modern product that is WaterSense-certified can make a difference for buyers interested in sustainability features. If the bathroom needs more attention, focus on a few key areas to get it looking good as efficiently as possible.
  6. Vanities are one of the main focal points in a bathroom. Luckily, you can find quality in-stock options that enable you to upgrade affordably so you can invest more elsewhere. The Home Depot offers a vanity configurator to pick the perfect vanity at a price that won’t eat up your entire budget.
  7. Flooring is key throughout the house but perhaps especially in the bathroom. Tile remains popular, and it can get expensive if you let it. Focus on middle-of-the-road options with colors and patterns that play well with tile in the shower, as well as other flooring around the house.

Be selective when taking on a remodel. Start with rooms like the kitchen and bathrooms to give yourself the best chance at solid ROI. Even within those rooms, keep it basic when you can so you’re able to invest more in high-visibility updates for which potential buyers are looking.

By Cameron Mickey, National Pro Manager, The Home Depot

Cameron Mickey has been with the Home Depot for 27 Years. In his current role, he is responsible for managing national accounts while overseeing business-to-business relationships with government and e-commerce customers in the Western Division. Mickey has held a variety of roles in the company, including Director of Capital Projects, Capital Projects Manager and Store Manager.