Tips & Tricks
Does a Bathroom Renovation Add Value? What You Need to Know
The pandemic spurred an extraordinary resurgence of remodeling activity in the U.S. Homes became a kind of refuge, and people desired improvements and updates that improved comfort and practicality.
But even as employers welcome back workers and people are returning to the office, remodeling interest continues to expand. Bathroom remodeling in particular is among the most popular renovations, with U.S. households spending a staggering 19 billion annually. And because people depend on bathrooms as places to relax and recharge, it’s no wonder they’ve become a top remodeling project for those who plan to sell — 26% of home sellers make improvements to at least one bathroom prior to listing.
But what’s the ROI on a bathroom remodel? More importantly, how can you get the most out of your bathroom investment? We’re taking a look at bathroom remodeling ROI and what you can expect for different types of projects. We’re also sharing best practices for bathroom design so you’re happy with the end result, whether you plan to sell now or enjoy your new bathroom for years to come.
Mid-range bathroom remodel
This is a popular type of project because you can mostly achieve your desired look and functionality without having to do major construction work. Because of its smaller size, this type of bathroom project most closely resembles a secondary bathroom, a kids’ bath, or guest bathroom.
Product quality in a mid-range bathroom remodel occupies more budget-conscious choices with a splurge or two thrown in to enhance comfort and design. The size and layout of the bathroom plan do not change, but most furnishings and fixtures get an update. This would include a new alcove or drop-in bathtub, vanity, sink, mirror, toilet, and plumbing fixtures. It could also include tile in the bathtub and shower area as well as upgraded tile flooring.
Average cost to remodel: $24,424
Average bathroom remodeling ROI: 60% or approximately $14,641
Bottom line: Watch homebuyer trends and preferences. In their recent Homeowner Housing Trends study, Zillow noted that 81% of those selling their home are looking for a home with newer or upgraded features. If you’re planning on listing your home in the next year, it’s wise to consider what buyers expect so you can recoup as much of your investment as possible.
Upscale bathroom remodel
For that spa-worthy, get-away-from-it-all experience, you may be looking at a full-scale renovation job. If this is the type of bathroom you are envisioning, you’re not alone.
A resort-inspired bathroom continues to be a popular remodeling project among homeowners, with 41% saying they use their bathroom as a place to rest and unwind.
Commonly referred to as an upscale or primary bathroom remodel, this project usually involves creating more square footage, extensive demolition, and an updated layout to improve functionality and flow. New plumbing and electrical systems are also included to accommodate the new shower, bathtub, and light fixture locations. All furnishings and fixtures are refreshed with higher-end replacements, including a freestanding tub, shower or wet room, toilet, dual vanity and mirrors, stone countertops, and lighting. For example when remodeling to include premium features, nearly 70% of homeowners added a soaking tub and 55% included a rainfall shower.
Average cost to remodel: $75,692
Average bathroom remodeling ROI: 55% or approximately $41,630
Something to note when evaluating a remodeling project of this size, is that the popularity and demand may vary regionally. For example, on the West Coast, while the average project cost is higher at $84,266, more buyers prioritize them when house hunting, raising the average return on your investment to nearly 61%.
Bottom line: As with all things real estate, knowing your local market conditions is key. Check out the data specific to your area or ask a real estate agent on what home features are popular in your market.
Universal bathroom design remodel
As more people choose to live in their homes longer, there’s been more interest in universal home design. This approach to interior design aims to increase the functionality of a home to include everyone, no matter their ability. This type of design can be especially appealing to people who desire to age in place (retire in their current home) or who plan to care for an aging or disabled family member. Universal design principles in the bathroom should consider both layout and product choices to improve accessibility, like wider doorways and lower counter heights to accommodate a wheelchair, a curbless shower, anti-slip flooring, and grip bars in the bathtub and shower.
Average cost to remodel: $38,813
Average bathroom remodeling ROI: 57.9% or approximately $22,475
Bottom line: The pandemic has caused Baby Boomers to retire at a faster rate than anticipated. While many of this aging population are active and healthy, they may be searching for homes with universal design features that allow them to live comfortably, safely, and independently.
Bathroom addition
Older homes and homes with an insufficient number of bathrooms may benefit from a full bath addition. Whether it’s a smaller secondary bathroom or a large primary bathroom of 100 square feet or more, this type of project requires a design plan, framing, drywall, and brand-new electrical and plumbing work. That’s in addition to flooring, tile, fixtures, and vanity. The increased number of trades and materials add up quickly in a full bathroom addition, so it’s wise to discuss your plans with a professional remodeler and even a real estate professional to determine if it’s the best decision for you.
Average cost to remodel: $56,946 to $103,613
Average bathroom remodeling ROI: 53.1% to 52.8%
Bottom line: While the investment for a bathroom addition could be significant, it can offer a good return on investment. For example, in a healthy housing market in a neighborhood of older homes, a home with a bathroom addition will be more appealing to buyers and could sell faster and for a higher price.
Maximizing your ROI on a bathroom remodel
In order to get the most out of your bathroom remodeling investment, it seems simple, really: Spend less on materials to increase your margins. But there are other ways to get more mileage out of your bathroom project beyond savings on materials. Let’s break down a few:
Fix bad bathroom design
More people are using bathrooms as places to relax and unwind, so they need to balance comfort and functionality. Fix any design low-hanging fruit, like making any necessary repairs to plumbing and lighting and correcting a bad layout.
Consider comfort first
No one wants to feel awkward or uncomfortable in a bathroom, so it can be something as simple as repositioning a toilet or shower to improve the room’s flow. Simple solutions include creating opportunities for soaps, shampoos, and towels to be within easy reach. If you live in a colder climate, consider radiant flooring as a splurge-worthy and cozy touch.
Address buyers’ pet peeves
If you’re planning to sell soon, keep home buyers' needs and wants top of mind when evaluating your bathroom’s ROI. In Houzz’s 2021 Bathroom Trends Study, the top three buyer pet peeves in the bathroom are old and outdated design, inadequate storage space, and small showers.
Incorporate top bathroom trends
While most bathroom designers would recommend choosing a timeless design over trends, there are ways to integrate popular themes that will stand the test of time. There’s more interest in organic and natural materials in the bathroom, in addition to more natural light. Convenience and energy efficiency are also priorities, so smart technology in showers and faucets will go a long way in creating comfortable environments that are better for the environment.
Consider ROH instead of ROI
Sometimes a bathroom remodel’s ROI shouldn’t be measured in dollars and cents. Consider your happiness in seeing a major renovation project through and the enjoyment you’ll get out of an updated bathroom, especially if this is your forever or long-time home. This is a return on investment that will improve your quality of life and enjoyment of your home for years to come.
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Sources:
https://www.remodeling.hw.net/cost-vs-value/2021/
https://www.zillow.com/report/2018/sellers/the-listing-process/
https://www.jchs.harvard.edu/iah-2021-expenditures-project-type
https://www.zillow.com/research/homeowners-consumer-housing-trends-report-2021-29736/
https://www.houzz.com/magazine/2021-u-s-houzz-bathroom-trends-study-stsetivw-vs~153944369
https://nkba.org/research/nkba-design-trends-2022/
Images by: Style by Emily Henderson & Arbor & Co
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