If you've watched HGTV, you know that a remodel takes approximately 45 minutes, and the ROI of that remodel is always worth it. Of course, HGTV is not reality. In Northeast Ohio, the Cleveland home remodel ROI outlook is influenced by various factors, including market trends, the location of the home, and the specific types of renovations. This piece delves into whether or not you can calculate the exact ROI for different remodeling projects, how the local market affects these returns, which investments might be considered risky, and why you should still consider doing them.
What Types of Remodeling Projects are Expected to Offer the Best ROI in Cleveland in 2024?
This year, with interest rates higher than anyone prefers and markets changing, you want to look out for home improvement projects that offer the best ROI for homes in the Greater Cleveland metro while upgrading your home in a way that ensures its functionality for years to come. We’ve assembled a list of the best (and worst) remodeling projects for Northeast Ohio and common mistakes to avoid.
1. Kitchen Remodels
If you’re like many homeowners, remodeling the kitchen is high on your list of home improvements for your home. An updated kitchen that reflects the overall style of your home and matches its value can offer an excellent ROI if you plan on selling your home. However, investing in the wrong kitchen for your home can weaken your ROI. An extravagant kitchen for a modest starter home won’t raise your home’s ROI as much as it will make it harder to sell the home to its target demographic. By the same token, if your home is of higher value and your kitchen remodel has a more modest budget, you can also diminish the value of your home with a kitchen remodel.
2. Bathroom Renovations
Bathrooms are another area where you can add value and function to your home. Simple updates like new fixtures, improved lighting, and modern tiling increase your home's value. Adding an additional bathroom can also increase your ROI, although remember that a bathroom can be less valuable than a bedroom, which is still expensive to install. Add a bathroom if you need a bathroom. If you don't, we recommend remodeling your current one.
3. Energy-Efficient Upgrades
These small and subtle upgrades are becoming more popular with the increased sustainability awareness. Installing energy-efficient windows, adding insulation, and updating HVAC systems reduces utility costs and appeals to environmentally conscious buyers, contributing to the overall ROI of your home.
How Does the Local Cleveland Market Affect the ROI of Specific Remodeling Projects?
The number one phrase in real estate? Location, location, location. While national and state trends make headlines, the most important market is the one you live in. The unique characteristics of Northeastern Ohio real estate impact the ROI of specific remodeling projects, making some more valuable than you might assume but others less so. Here are a few of the conditions that impact our Northeastern Ohio market, which in turn impacts the ROI of Greater Cleveland area remodeling projects.
1. Housing Market Conditions
The Northeast Ohio housing market has grown steadily in recent years, with rising home prices and a healthy demand for quality housing, creating a strong ROI in construction. However, the cost per square foot for a new build is often less than that for many remodeling projects. This does not mean remodeling is a poor investment but a personalized one in your home and future. As we said earlier, matching your remodeling project with your home is important.
2. Neighborhood Trends
ROI can vary significantly by neighborhood. A good rule to remember is that you don’t want to have the nicest house in the neighborhood, but neither do you want to have a house that is behind the times. A beautiful, updated home that is tastefully designed and oriented to its neighborhood produces the best ROI in construction.
3. Homeowner and Buyer Preferences
If you choose to remodel your home, remember that you are investing in your lifestyle. Don’t remodel a space into something less functional and attractive for your family just to attract prospective homebuyers. Northeastern Ohio has a growing interest in open-concept living spaces, modern kitchens, and energy-efficient homes. Tailoring remodels to meet these preferences can lead to a higher value of home renovations in the Greater Cleveland area.
What Remodeling Investments Are Considered Risky in Terms of ROI in the Cleveland area?
While many remodeling projects can enhance your home's intrinsic value, some investments may not offer the desired returns and could be considered risky in this market. Some of these might be quite obvious, but others are not.
1. Overly Customized Renovations
Suppose you’re considering highly personalized renovations, such as converting a garage into a home theater or installing a lavish wine cellar. In that case, these may not appeal to many buyers. While these remodeling projects do upgrade your life and elevate your experience, they may not be the best choices if you’re looking to increase your home’s market value, making them risky in terms of home improvement ROI in the Cleveland metro.
2. High-End Luxury Upgrades
In certain neighborhoods, high-end luxury upgrades might not align with the local market's expectations. Installing expensive, top-of-the-line finishes in a mid-range home could result in lower returns, as potential buyers may not be willing to pay a premium for these features. Make sure the finishes you choose match the neighborhood you're in.
3. Regionally Inappropriate Modifications
Every kid dreams of a swimming book in their backyard, even in Ohio! While a swimming pool can be a desirable feature, it often does not provide a high ROI, particularly in regions with colder climates like ours. Adding something regionally different, like a pool, is likely not the best value for home renovations in the Cleveland metro or anywhere in Northeast Ohio.
Invest in Your Home and Community
While there’s no tried-and-true formula for improving your home’s ROI through a specific remodel type, investing in home remodeling in the Greater Cleveland Metro area in 2024 can be a strategic way to increase property value and enhance your living spaces. Keeping neighborhood trends and what makes sense for homebuyers in your area allows you to balance your remodeling goals.
Remodeling a home creates a positive ROI if you plan on selling it, but remodeling should ultimately be for the homeowners doing the work. Create a space ideal for your family and life while keeping trends and these tips in mind. It's essential to consider the local market dynamics and avoid overly customized or extravagant renovations that may not offer significant ROI. By staying informed about market trends and buyer preferences, you can make smart remodeling decisions that boost your property's value and appeal.
Contact Chagrin River Company
If you're looking to begin a remodeling project to expand your Northeast Ohio home and raise its value, the time to start is today. Don't delay and miss out on this opportunity. We service clients in the Greater Cleveland Metro area and all over Northeast Ohio.
Contact Chagrin River Company to see what we can build for you!
