Home Improvements That Increase the Value of Your Home
Whether you are planning on selling your house sometime soon or down the road, home improvement projects can have a big impact on the resale—for better or for worse. Before you begin a labor-intensive or expensive project, it’s important to consider what the return on investment will be when you do put your house up for sale.
To get the most bang for your buck, you need to think like an appraiser. Knowing what they take into account when evaluating a home and how they determine its value, will help you decide which projects are worth your time and money.
Ultimately, when appraisers evaluate a house, they care about the square footage, number of bedrooms, number of bathrooms and whether you’ve updated anything since buying it. If you’re going to remodel your house, here are four surefire ways you can increase the value and appeal of your home.
Add living space. The number one thing you can do to increase the value of your home is add living area. One way to do this is to add square footage through a home addition. Another way you can add living area is by transforming your current space to add more bedrooms or bathrooms.
For example, if you currently have a three bedroom home with a 24 x 24 master bedroom, you could easily transform it into two 12 x 12 bedrooms. Now your house is comparable to other four bedroom homes on the market and will appraise higher.
Maximize your available budget. If you have $12,000 available to spend on remodeling your kitchen, why not put $8,000 toward transforming your kitchen and $4,000 toward adding a bathroom. In addition to having an updated kitchen, you’re house will rank amongst homes with more bathrooms, which typically sell for a higher price.
Update anything that needs updating. Are there any rooms in your house that could benefit from an update? Are there any appliances that are old or outdated? Don’t forget to think about items you normally take for granted, such as your furnace or roof. Buyers expect these items to be in good shape and most won’t even consider purchasing a house if it needs costly repairs.
Also, if you’re going to spend the time and money to update your house, allocate your resources wisely. While you may think that using high-end materials will significantly increase the value of your home, that’s not necessarily the case. Because an appraiser does not take into account the quality of materials used, you’re better off purchasing middle-of-the-road materials and using the extra money to make additional updates.
Curb appeal is important, too. Oftentimes, sellers are so focused on improving a home’s interior that they forget about the exterior. Although we’re taught not to judge a book by its cover, you want the outside appearance of your home to make a good first impression on buyers.
Sellers aren’t the only ones who can benefit from increasing the value of their home. Home improvement projects can help homebuyers decrease their loan-to-value (LTV) ratio and build equity quickly.
What home improvement projects are you thinking about starting this fall?