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7 Home Renovations with the Best Return on Investment in Phoenix

7 Home Renovations with the Best Return on Investment in Phoenix

As a remodeling firm that has lived and breathed home remodeling in Phoenix for years, we've gathered a wealth of insights on how to get the best bang for your buck. Whether you're sprucing up to sell or just for your own enjoyment, understanding which home renovations have the best return on investment is crucial to you feeling comfortable with your choice to remodel.

Understanding ROI in Home Remodeling

What is ROI in Home Remodeling?

Simply put, ROI (return on investment) is the outcome of what you invest in your remodel. In the Phoenix area, where the sun shines year-round and outdoor living is embraced, certain remodels yield higher returns than others.

Factors That Influence Home Improvement ROI

Unsurprisingly, some home renovations that work in cooler climates might not have the same punch here in the desert. For instance, while a fireplace might be a huge selling point in one of our snow-bird states, like Minnesota, it's less likely to recoup the same percentage of costs in our toasty neighborhoods like Mesa or Scottsdale.

Several factors dictate the return on investment you can expect from your home renovations in the Phoenix area. The foremost among these is the real estate market. Typically, a robust market means a higher ROI as buyers are willing to pay more for upgraded features in a home. On the contrary, during a slow market, buyers often search for bargains and may not be willing to pay a premium for higher-end upgrades.

The Real Estate Market in Phoenix: Predictions

The Phoenix real estate market in 2024 is expected to show signs of positive growth following a period of price decline. For starters, after the Phoenix housing market experienced a decline in home values in recent months (a trend common across many U.S. cities),  Zillow forecasts a rise in median home values for the Phoenix-Mesa metropolitan area by approximately 5.8% from May 2023 to May 2024, indicating a positive turnaround from previous declines. This upturn is supported by a steady demand from buyers, bolstered by significant population growth in the area​.

​Source: https://homebuyinginstitute.com/mortgage/phoenix-arizona-housing-market/ 

Additionally, the Jablonski Group reports in their January 2024 update that the following cities are in a seller's market (strongest to weakest): Tolleson, Apache Junction, Fountain Hills, Chandler, Gilbert, Laveen, El Mirage, Glendale, Sun Lakes, Pheonix, Scottsdale, Mesa, Avondale.

What does this mean for major home renovation projects? The Phoenix real estate market in 2024 presents an encouraging scenario for homeowners considering investing in renovations, as the market shows signs of recovery and growth. With a probable increase in home prices and a rise in demand, homeowners renovating their properties might find themselves in a strong position should they decide to sell in the near future.

Other significant factors include the quality of the renovation, the level of maintenance needed post-renovation and the current trends in home design. High-quality renovations using durable materials are more likely to retain value over time and those requiring little maintenance will appeal more to potential home buyers. Lastly, investing in upgrades that align with modern design trends can make your home more attractive to most buyers, thereby increasing the ROI.

Measuring Remodeling Success

When you work with us, we stress that any remodeling project should not be just about the dollars and cents. Success can also mean creating a space that brings your family enjoyment or enhancing energy efficiency.

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Home Remodeling Projects with the Best Return on Investment in Suburban Phoenix

After considering all these factors, here are our top home renovations for great ROI in suburban Phoenix:

1. Kitchen Remodel

A well-designed, kitchen renovation is a major selling point for many buyers. With the increase in open-concept floor plans, the kitchen has evolved from a purely functional space to the heart of the home, where families gather over meals and socialize. This makes investing in a high-quality kitchen remodel a worthwhile endeavor. By installing new countertops, upgrading appliances to energy-efficient models, installing hardwood floors and other modern touches like a stylish backsplash, you can expect a robust ROI when you decide to sell your home.

2. Bathroom Remodel

Next to the kitchen, bathrooms are one of the top areas home buyers look at when purchasing a home. A bathroom remodel that includes replacing outdated fixtures, adding a double vanity, or even installing a walk-in shower can significantly increase the potential value and appeal of your home.

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3. Energy-Efficient Upgrades, Like New Windows and Doors

Energy efficiency is not just a buzzword; it's a selling point because energy-efficient homes are in high demand. When undertaking a home addition or remodeling project, consider investing in new windows and front door with a higher energy rating. Along those same lines, if you are looking for a home improvement project that adds value (whether you are selling soon or not), replacing old windows, especially in the Phoenix area, not only increases the home value but also can reduce your energy costs. Other upgrades to consider include your home's HVAC system, installing solar panels and smart home features (noted below).

4. Increase Living Space

If you have existing space in your home that's under-utilized, consider converting it into a functional room. This could be a den, office or even an extra bedroom. Whether you decide to build out or build up, there are many reasons why a home addition will improve your home’s value and the enjoyment you and your family get from adding living space.

5. Curb Appeal

First impressions matter when it comes to selling your home. Enhancing curb appeal by updating your home's exterior, such as landscaping, painting the exterior or even replacing the garage door, can make your home more appealing and increase its value.  Exterior improvements can also help differentiate your home from other properties on the market, especially when there is an oversupply of homes in a particular area.

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6. Outdoor Living Spaces

In Phoenix, where the weather is warm for most of the year, outdoor living spaces are highly sought after. Adding a patio or even an outdoor kitchen can greatly enhance the attractiveness of your home. Outdoor kitchens and fire pits are also popular features that yield a high ROI.

7. Smart Home Features

In today's world, where technology constantly evolves, home buyers are increasingly interested in properties with smart home features. Simple upgrades like installing a programmable thermostat, smart lighting or security systems can add value to your home and give you an edge in the market.

Whether your home renovation project is for personal enjoyment or to prepare for a future sale, aligning renovation efforts with these components can ensure that your investments not only enhance your living environment but also contribute to an efficient and profitable sale. By focusing on these strategic improvements, homeowners can confidently move forward with planning home renovations with the best return on investment.

Strategically chosen home renovation projects in the Phoenix area enhances your enjoyment and increases the property's market value. With a strategic and skilled team of professionals leading your project, your can increase the enjoyment you get from your home as well as your property's market value - giving you a home you love to live in.

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