Return on Investment of Home Improvement Projects - Exploring Perceptions and Spending on Renovations

Return on Investment of Home Improvement Projects

Exploring Perceptions and Spending on Renovations

The missing blind in your bedroom, squeaky sliding door, and stove burner that doesn’t get as hot as it used to are easy to overlook when you spend most of your time out of the house. But as people are merging home and office and staying home to social distance, imperfections have become the center of attention. Since the start of the pandemic, home improvement projects have spiked enough for some experts to call for a home improvement tax credit.

Which rooms and renovations are people focusing on the most, and does return on investment really matter? We surveyed over 1,000 homeowners about home improvement projects to find the most popular renovations, how spending differed by generation, and if people were undergoing changes for future financial benefit or just for basic livability. Keep reading to see what we found.

Perceptions of Value

Stoneside Home Improvement ROI - Perceptions of Value Infographic

Becoming a homeowner typically tops the list of young Americans’ dreams, but buying and maintaining a home is a serious long-term investment with many pros and cons. Considering the significant amount of money put in, every homeowner planning home modifications and improvements should consider whether it will provide a great return on investment (ROI). But depending on the type of project and room in which the renovation will occur, the ROI can differ. According to nearly 51% of homeowners, the kitchen is the area of the home offering the best ROI for renovations. Distantly following, 17.0% and 10.2% of homeowners said renovating the bedroom and living room, respectively, would provide the greatest ROI.

However, perceived ROI also differed depending on whether homeowners were planning to move within the next year. Among those planning to move, the majority thought the bedroom was the area offering the most ROI (37.4%), followed by the kitchen (29.9%) and bathroom (13.9%). Nevertheless, the kitchen still came out on top for homeowners not planning to move and even for those who were unsure about finding a new home.

Reasons for Renovating

Stoneside Home Improvement ROI - Reasons for Renovating Infographic

Factoring in ROI can help homeowners decide whether or not a home improvement project is worth the cost. Still, home improvement projects, like age-specific modification, are sometimes necessary for livability, while others, like updated blinds or drapes are simply for the homeowner’s benefit. However, for a whopping 72.1% of homeowners, ROI was a motivating factor in determining which renovations to do to at least a moderate extent. On the other hand, only 9.6% of respondents said ROI was not a factor at all. Instead, they completed renovations solely for their benefit or livability reasons.

Surprisingly, these sentiments were largely shared among the generations. Baby boomers, Gen Xers, and millennials agreed that ROI mattered to a moderate extent, with millennials the least likely to complete renovations for personal benefit or livability. While millennials are often scolded for buying homes later than previous generations, their increased focus on ROI may be related to their renting habits. Rather than buying their own homes, millennials have elected to “rentvest,” or invest in properties to let out, while continuing to rent their personal pad. Considering their approach to homebuying is all about investment, it makes sense their approach to home improvement would be as well.

Desired Upgrades

Stoneside Home Improvement ROI - Desired Upgrades Infographic

From manufactured stone veneer to window replacement, the home renovations with the highest ROI may not always align with the renovations homeowners want to do. According to our study, kitchen and bathroom repairs or remodels topped the most wanted chart for 27.7% and 24.3% of homeowners, respectively. The same types of renovations also topped the charts in terms of priorities for homeowners.

Considering the focus on kitchen renovations and that minor kitchen remodels were named the third-best home renovations in 2020 in terms of ROI, one may expect homeowners planning to move within the next year to be focused on the kitchen. However, of homeowners planning to move, the majority actually named bedroom repair or remodel as their top priority, while kitchen repairs or remodels were the top priority for both homeowners not planning on moving and those remaining unsure. This may be due to the ease of bedroom repairs compared to kitchen remodels. While new drapes or shades can quickly change the entire feel of a bedroom, updating kitchens often requires significantly more hard labor.

COVID-19 Remodels

Stoneside Home Improvement ROI - COVID-19 Remodels Infographic

Home improvement projects can cost a pretty penny, with the average American spending $7,560 in 2018. But with Americans spending most of their time at home, the homeowners we surveyed have already spent an average of $1,031 between March and August of 2020 alone. With a five-month spending of $1,178.41, Gen Xers reported spending more than any other generation, while millennials racked up an average of $998.68.

So, where did this money go exactly? Just under a third of homeowners reported completing bedroom renovations since the pandemic began, followed by kitchen and bathroom renovations. To save money while still making a significant difference in their living space, homeowners may have focused on smaller projects like adding window treatments or updating blinds, shades, or drapery, redoing vanities in bathrooms, or switching up their kitchen backsplash for a more upgraded look.

Whether the projects were large or small, homeowners also saved money by approaching the tasks as DIY projects. On average, doing projects themselves saved respondents just over $600 – making DIY a social distancing-approved activity and a penny saver. Recognizing the benefits, over 25% of homeowners completed bedroom renovations themselves, while 21.8% and 21.6% completed DIY kitchen and bathroom renovations, respectively.

Small Changes, Big Difference

The coronavirus crisis has thrown Americans into a new normal of necessary distance, increased time, and a lack of outlets. Whether it’s the magnification of imperfections or the extra free time to focus on projects typically placed at the bottom of the to-do list, Americans have turned to home improvement projects to keep busy. But homeowners aren’t throwing caution to the wind and undertaking meaningless projects – the majority are making educated investments and factoring in ROI before they embark on a new task.

While kitchen and bathroom renovations have been the most common since March, homeowners feeling current financial constraints may want to focus on smaller projects that will be enough to satisfy homeowner’s wishes while staying within budget. From shades and blinds to draperies and valances, Stoneside Blinds & Shades is here to help you transform your home without breaking the bank. Visit us online or call to schedule a free virtual design consultation today.

Methodology and Limitations

We conducted a survey of 1,001 homeowners about renovations and projects to be done around the house. Respondents were given a preset list of projects and rooms to consider. There was an attention-check question within this study to help filter out participants failing to read questions in full.

All averages of values in this project are based on at least 100 respondents, and the 95th percentile was used to control for outliers.

The respondents’ average age was 39.73 with a standard deviation of 12.4.

This survey is based on self-reporting and respondents were able to write in their own numerical values. This could lead to exaggeration or underreporting of values. Responses are not weighted and should be considered for exploratory purposes only.

Fair Use Statement

Home improvement projects may be a fun quarantine activity, but make sure the money you and your loved ones are putting in is worth it in the end. Feel free to share this project’s findings with your readers or renovation partners as long as it’s for noncommercial purposes. All we ask is that you include a link back to this page, so readers can view the project in its entirety and our authors receive proper credit.