Top 7 Home Renovation Tips For Making More Money [2022]

san diego house renovation tips

Looking to make money renovating your house in 2022?

I recently completed a home renovation which gave me a whopping 53% return on investment.

And these numbers aren’t uncommon. According to an ATTOMDATA report, the average gross ROI for flips was just under 41%.

Here we will explore how the pros maximize profits from their home renovations and how you can too.

So if you’re looking to rehab your home before you sell, or just want to invest your money wisely, we’ve got the answers below.

Let’s dive right in.


1. Start with a budget.
2. Know when to stop
3. Understand your target market
4. Understand what your competitors are doing
5. Upgrade in what people love
6. When to hire a professional
7. Have an end goal in mind
8. (bonus tip) where the ROI ends

Remodeling your home before selling is a common tactic used by many to increase a house’s value before a sale. While this is a great strategy that works much of the time, it can be easy for people to go overboard and spend too much money on items that have little to no return.

Even worse are those on the other end of the spectrum who spend too little money, diminishing their returns and reducing the overall listing price.

So how do you know where to put your money when renovating your home? This guide will help you decide where to invest your money wisely, how to plan your rehab professionally, and how to maximize your ROI when getting ready to sell.

1. Start With A Budget.

Starting with a budget is always the first step to a successful renovation. Whether you have $5,000 or $20,000 to spend, knowing how much you can afford will make all the difference in deciding what you should fix up and what order to prioritize things.

AND DON’T GO OVER YOUR BUDGET. Trust me; people will try to talk you into it.

Once you have a budget in place, you can now start to get various quotes on projects that you think would make the biggest difference in the listing value of your home. You can also have these quotes itemized in order to begin to pick and choose what work you want the contractor to do and what work you think you can do yourself.

2. Know when to stop

One of the biggest problems when rehabbing is knowing when you’re finished. It’s not that we all have some crazy out-of-control urge to keep spending money. The problem happens when you put in that new carpet and freshly painted walls. Suddenly, the kitchen cabinets, faucets, and wall switches seem to look outdated at comparatively old. Once you fix those items, then the room next to it starts to look dingy in comparison.

Every time you renovate one thing, the next big item begins to look outdated. Have a game plan for this and understand how your upgrades will affect surrounding items.

3. Understand your target market

This is probably the most important step here. What I mean by this is you need to know who the ideal buyer for your home will be. Are they a 25-year-old who just got his first promotion? Or a thirty-something-year-old who just had a child and needs to upsize their house? The finishes you select, the areas you rehab, and the amount of money you decide to put in is always based on your buyer’s wants and needs.

4. Understand what your competitors are doing

This is the easy (and fun) part.

Even in this seller’s market, you aren’t the only house on the block that buyers are looking at. Going to a few open houses in your neighborhood can give you a great example of what looks good (and what doesn’t). It will also show you what sells fast, and what would is considered “overkill.”

For example, why put in granite countertops if your entire neighborhood has laminate? And what’s the point in hardwood flooring if LVT would suffice. This is an excellent way to waste money. The point here is to stay close to what is working with other houses as possible. You also may be able to position yourself in a slightly better position than your competition.

5. Upgrade in what people love

This ties into the above tip, but I want to harp on another point here. Do NOT base your rehab on what YOU think looks good. This rehab isn’t for you. Instead, make sure to talk to agents, look online (Pinterest, for example), and check out what other for-sale houses look like in the area. Make sure that you spend your money on finishes that are generally accepted and that sell. Just because you like a bright-colored backsplash doesn’t mean that your target market will.

6. Hire a professional

We all know someone who decided to do the work on their own in order to save money and ended up never finishing the job. They either ruin the work, or end up hurting themselves.

The main reason to hire out to a licensed and bonded contractor is liability. The last thing you want is a buyer hurting themselves and coming back at you for your shotty work. If a great contractor is hired, the work will be done correctly, and his work will come with a warranty. Nothing screams “do not buy me” more than DIY work that looks sloppy and unprofessional.

7. Have an end goal in mind

This may be the most advanced tip. When performing a rehab to increase the sale price of your home, you want to know the exact amount of money you stand to make.

For example; say I talk to a realtor and find out my house in its current condition will sell for around $600,000. Let’s say we also know that fully renovated homes in the area are selling for $680,000.

I can then speak to a general contractor who tells me that the required upgrades to match the houses down the road will cost $40,000.

Now the math is easy! Spend $40,000 to make $80,000, or in other words, double our money. Solid, on purpose, and predictable.

(This may contrast with people who start randomly making upgrades to get the most money possible. They have no idea how much they will spend to get to their objective and no idea how much they will make after the renovations. Talk about shooting in the dark.)

8. Bonus tip

Some items and upgrades will get a lot more for your money than others.

For example, spending $500 on a smart thermostat and camera doorbell might seem cool. But if it doesn’t increase the value your house sells for, you just lost money.

I usually approach it like this: If I were in the market to buy this house (or others like it), what are the make-or-break items, what would persuade me to spend more than the similar house down the street, and what would I ignore.

All things being even, I’m not going to offer you $600,200 for a home with a fantastic doorbell camera and only offer $600,000 on a similar house without one. Let’s face it; both properties are getting offers of 600k.

As a general rule of thumb, upgrades in the kitchen and bath can get you a great ROI. $2.00-$3.00 back for every dollar spent is not unheard of. Some items (new faucets, ceiling fans, fixtures) can simply give your house a competitive advantage and a fresh feel.

Maybe you get $1-$2 back for every dollar you spent, but you also just created a polished look, making people fall in love with the house (this is good!).

That cool ceiling fan remote, those expensive blinds you just put in, or that premier quality paint you spent $70/gallon on may go unnoticed. Throw away the remote, put in $10 blinds from Lowes, and paint with medium quality paint, and I bet you get the same offer.

So be selective about your upgrades. Only spend money on something if you think it will pack a solid punch.

For example, suppose you see that putting $50,000 will increase the house’s value by $55,000. In that case, you are probably over upgrading, or maybe you’re spending too much money in the wrong areas.

However, if spending $25,000 on this same house will get you $45,000 back, then you can see how much harder your money is working for you. Or, in other words, you would go from a 10% return on investment to an 80% return on investment. Make sense?

If you have any general questions about remodeling your home or are interested in selling, contact us at or comment below!

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