Sources for ROI for home reno projects in DC

[Anonymous]

Is there a reliable source for what the ROI is in popular areas of NW DC for various home renovations? Like, for ex, roughly what percentage you’re expected to get back renovating a bathroom, etc?

[Anonymous]

No, I mean no one can really calculate this. You can’t sell the same house with and without.

In general I think doing small projects in a house that needs or is near needing a full overhaul and/or expansion to keep up with the market is the worst ROI.

Like if you have a house where the market thinks they need to blow out the back and add on, and you redo the finishes in the galley kitchen, you won’t get anything back.

Design matters a lot too.

[Anonymous]

There is no positive ROI on home reno projects beyond basic upkeep. Do it if you want it for yourself. Don't do if for resale.

[Anonymous]

Anonymous wrote:There is no positive ROI on home reno projects beyond basic upkeep. Do it if you want it for yourself. Don't do if for resale.

Source?

[Anonymous]

Anonymous wrote:There is no positive ROI on home reno projects beyond basic upkeep. Do it if you want it for yourself. Don't do if for resale.

+1. This is general knowledge. You do not get the full cost of the project when you sell. If you wait long enough, appreciation may exceed your costs, but some of that would have happened without the reno.

[Anonymous]

When OP said “roi” I just assumed we were in negative territory, but by how much can matter.

Like if you spend $50k to update finishes in a kitchen in a house that needs an overhaul, I think you’re getting 0-25% of that back in increased value.

If you redo a master bath for $40k that really needs it and you do a nice job and now the whole house is pretty turn key, I think you could see 80% back. Etc.

[Anonymous]

Flippers obviously make money. People can make money with home improvements. The trick is figuring out when this is possible.

If you have an estate sale property with 1960s kitchen in shabby condition, worn bathrooms, etc, then a renovating those will likely see you recouping your investment and more.

But if you're facing replacing a perfectly good 1990s kitchen with a new kitchen, you're not getting a good ROI.

I find that the best way for a DIY home renovator to make money from a renovation project is to find a well-cared estate sale property, where fixtures and kitchen/baths are very dated and house needs cosmetic updates but is otherwise structurally solid. You can live in the house while doing a lot of DIY with some contracting help over four-five years. This is where "sweat equity" really plays a factor. Then you have a house ideally in full turn key condition and updated, and people will pay a premium for it. But you also have to be smart about it, there is always the risk of overimproving for your market if you're not careful where you initially buy.

[Anonymous]

Anonymous wrote:When OP said “roi” I just assumed we were in negative territory, but by how much can matter.

Like if you spend $50k to update finishes in a kitchen in a house that needs an overhaul, I think you’re getting 0-25% of that back in increased value.

If you redo a master bath for $40k that really needs it and you do a nice job and now the whole house is pretty turn key, I think you could see 80% back. Etc.

OP here and yes, that’s what I mean. I know I’m not getting 100 percent but just was hoping to find a source for approximates in this high demand area of DC.

[Anonymous]

Talk to a real estate agent. ROI is usually 20-80%.

[Anonymous]

They do an annual survey and report.

https://www.remodeling.hw.net/cost-vs-value/2023/

[Anonymous]

Thanks!

[Anonymous]

Anonymous wrote:Flippers obviously make money. People can make money with home improvements. The trick is figuring out when this is possible.

If you have an estate sale property with 1960s kitchen in shabby condition, worn bathrooms, etc, then a renovating those will likely see you recouping your investment and more.

But if you're facing replacing a perfectly good 1990s kitchen with a new kitchen, you're not getting a good ROI.

I find that the best way for a DIY home renovator to make money from a renovation project is to find a well-cared estate sale property, where fixtures and kitchen/baths are very dated and house needs cosmetic updates but is otherwise structurally solid. You can live in the house while doing a lot of DIY with some contracting help over four-five years. This is where "sweat equity" really plays a factor. Then you have a house ideally in full turn key condition and updated, and people will pay a premium for it. But you also have to be smart about it, there is always the risk of overimproving for your market if you're not careful where you initially buy.

Most flippers make money because they are doing the work with their crews. So the markup for them is nothing compared to rest of us. Flippers are not hiring Case to come and do the work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:There is no positive ROI on home reno projects beyond basic upkeep. Do it if you want it for yourself. Don't do if for resale.

+1. This is general knowledge. You do not get the full cost of the project when you sell. If you wait long enough, appreciation may exceed your costs, but some of that would have happened without the reno.

“General knowledge” is not a source. Where is the documentation that there is “no roi” for home renovations?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Flippers obviously make money. People can make money with home improvements. The trick is figuring out when this is possible.

If you have an estate sale property with 1960s kitchen in shabby condition, worn bathrooms, etc, then a renovating those will likely see you recouping your investment and more.

But if you're facing replacing a perfectly good 1990s kitchen with a new kitchen, you're not getting a good ROI.

I find that the best way for a DIY home renovator to make money from a renovation project is to find a well-cared estate sale property, where fixtures and kitchen/baths are very dated and house needs cosmetic updates but is otherwise structurally solid. You can live in the house while doing a lot of DIY with some contracting help over four-five years. This is where "sweat equity" really plays a factor. Then you have a house ideally in full turn key condition and updated, and people will pay a premium for it. But you also have to be smart about it, there is always the risk of overimproving for your market if you're not careful where you initially buy.

Most flippers make money because they are doing the work with their crews. So the markup for them is nothing compared to rest of us. Flippers are not hiring Case to come and do the work.

Flippers aren’t hiring case, but they’re also not swinging a hammer.

I GC’d my own projects and had Case bid on a couple, as it turns out. Their ballpark starting figure was double what my entire budget ended up being using high end finishes and making “might as well” tweaks along the way. And I felt like we went over budget!!!

[Anonymous]

Anonymous wrote:Is there a reliable source for what the ROI is in popular areas of NW DC for various home renovations? Like, for ex, roughly what percentage you’re expected to get back renovating a bathroom, etc?

Why don’t you browse Zillow/redfin and see how much unrenovated vs renovated places are going for (sold comps only) and then compare that to what a conservative appraisal of your house might be.

That’s going to be your best bet.

There is ROI to be had but if you have ugly granite counter tops and replace with very neutral high end quartzite, your ROI will be less than if you go from Formica than to ugly granite. So it depends on the marketability of what you currently have.

I’ve only purchased/lived in houses that are less marketable with the express purpose of being able to renovate to my liking while knowing I’ll get a solid ROI because tasteful renovations expands the buyer pool and makes it much more competitive/marketable. If you’re buying someone else’s renovations and pay at the top end of your area, and you rip it out and redo it, your opportunity for ROI is very low.