You’re excited about getting started on increasing your home’s value, and we get it!
There are renovations to think about, DIY projects and color schemes to pick out, landscaping decisions to consider, and much more.
This is not even mentioning the ever-practical concerns of improving your home’s safety and energy efficiency requirements.
Generally, if you’ve maintained your home to a reasonable standard, there’s nowhere to go but up. And for those ready to start redesigning their living space, renovations can be a combination of elements that enhance your current lifestyle while remaining practical for a resale later. And that’s just the long-run view.
The good news for anyone hoping to sell their home in the near future is that the renovations that add the most value to your home tend to be the least expensive.
Home values are complicated figures which are dependent on numerous factors, so it’s always best to consult local experts about any big ideas that you have for your home.
The most important advice we can give you is to consider your local market. National averages can tell you a lot about the overarching trends in home values, but when it comes to increasing the value of your home, local market desires are critical to consider.
Strategic Considerations for Increasing Your Home’s Value
You should make strategic, well-researched decisions when improving your home.
There is a difference between price and value. Market value is a supportable opinion or estimate based on comparable sales in a given location. Yet market value does not always dictate asking price.
There are many changes that you can make to your home to boost it’s value. One of the most important is having your home “move-in ready” so the new homeowner(s) can immediately get on with their life.
Home value considerations should align with your overall five and ten-year goals such as career moves, general financial plans, family, and lifestyle desires. The following questions will help you look at the big picture when evaluating your time frame, home goals, and deciding upon a realistic budget. To begin, start asking yourself:
1. How Long Do You Think You Will Live in Your House?
If you need to put your home on the market immediately or in the next year or two, it is best to invest in small improvements and tune-ups.
Minor updates have great returns, and in some cases, they could save you from taking a major loss in home price. Fixing and cleaning up the home before you put it on the market ensures that you get paid what your home is really worth.
Most tune-ups will not help to increase the market value of your home, but they can dramatically increase the sale price. For instance, a simple bathroom tune-up, like the one we suggest later in this article, could get you a three-fold return on your investment.
If you see yourself staying in your home for the next five or more years, then major remodels can be a good option to add market value to your home.
Versatile renovations, which make your rooms more flexible to different lifestyles, will be the most marketable in the long run, but every dollar should improve your own lifestyle as well. This is because most renovations won’t pay you back in full. On average, in 2018, homeowners could expect to get $.64 for every dollar they put into renovating.
When it comes to long-term home value increases, the key is flexibility. There are some investments that will get you better returns than others. And there are other investments that you may want to reverse or modify to be more flexible before selling your home down the line so that they won’t decrease your home’s value.
2. What Is the Housing Market Like Where You Live?
Before you begin any large renovations, consider your local housing market.
Craig Webb, the editor of Remodeling, explains that hot housing markets are more likely to honor the investments put into big home remodels than struggling markets:
“When the market is hot, realtors are more likely to give value to more expensive renovation projects, because they expect that the market will stay hot and people will pay the price,” he explains. “When the market is cool, Realtors tend to put less value on those big-dollar projects, because they have concerns about whether the house will get sold in any state.”
You can look up what renovations provide the best returns in your city.
You can do this by searching Zillow, Trulia, or MLS for home listings in your area. Sites like these make it easy to take note of how many bedrooms comparable listings might have and what kind of amenities these listings offer.
It’s also good to pay attention to what prices homes are selling for in your neighborhood. It is very difficult to sell a home that outprices the rest of your neighborhood, so steer away from overdevelopment.
Remodeling for your Lifestyle
In general, any remodel that costs more than $40,000 will not be justified by its returns.
Kitchen and master suite remodeling can easily reach $60,000-$100,000. While these add to the appeal of the home, you’re likely to find 60 percent or less of that money coming back into your pocket when selling your home. Instead, these are things that you do for yourself, so make sure it’s something you love.
Groom+Style have created a graphic of the highest-returning renovation investments according to Remodeling. Check out Remodeling’s regional and city-based information so that you can get a sense of the best remodels for your location.
Honorable mentions include siding replacement (76.7 percent ROI) and vinyl window replacement (74.3 percent ROI). In addition, the long-term market rewards investments which improve energy efficiency and safety.
Square footage is one of the surest determiners of home market value. Every 1,000 square feet added to a home increases its home value by 30 percent.
Building an extension is a costly and labor-intensive project that requires architectural considerations as well as electrical consultation, heating and cooling adjustments, and potential building and zoning permits.
That being said, extra suites and new spaces can pay off in the long run.
Additional studio-style or single bedroom apartments with small kitchenettes are among the more useful and sought-after building additions, along with detached garages.
The allure of a large, central, and high-tech kitchen holds a lot of sway over first-time homebuyers.
Overall, a minor kitchen remodel of about $19,000 has an 81.1 percent ROI. Going over $40,000 with your remodeling efforts will drop your return percentage to about 64 percent.
This includes a more modern or optimized suite of appliances (like a state of the art dishwasher or water purification system), sturdy quartz countertops, and wood flooring.
Modernization is also appealing in the kitchen, as individuals look for commercialized stainless steel and updated hardware, like modern kitchen faucets and a deep sink.
One of the most sought-after kitchen remodels is wood flooring. Wood flooring shows on average an 82 percent ROI and gives a wow-factor to any kitchen. In addition to being aesthetically pleasing, wood floors simplify the cleaning process and don’t hold odors as much as carpets.
For some homebuyers, a kitchen without hardwood flooring can be a deal-breaker.
A mid-range bathroom remodel of about $20,000 has a 70.1 percent ROI.
This can include replacing faucets, shower heads, and cabinet handles, as well as modernizing sinks. As an environmentally friendly measure, you might also consider installing a low-flush toilet for greater water efficiency.
Large luxury bathtub remodels are going out of style, as whirlpool bathtubs sit unused in most homeowners’ daily lives. Homebuyers are now interested in walk-in showers for everyday low-maintenance luxury.
And if your bathroom needs a little splash of style thrown in, subway tiles are a chic and timeless way of making splash walls and drainage floors.
Your Home Needs Curb Appeal
Buyers want their home to look good from the outside.
Renovations that enhance curb appeal, such as external siding, new and luxury garage doors (98.3 percent ROI), and an attractive front door generally offer higher returns than internal renovations.
Siding replacement is a big undertaking that can cost about $12,000 with a 76.7 percent ROI. Nonetheless, new siding can give a house a much-needed facelift and make your home look like new.
Create a grand entrance with a safe and attractive steel front door. Then, if your house needs the shade, consider an awning or overhang above the door.
Scrubbing and power washing will certainly enhance your curb appeal and improve the appearance of your home, and should always be done before putting your home on the market.
However, to increase your home’s value, you will need to invest in total replacement projects, such as a full replacement of windows and doors. Each time you do a total replacement project, you will likely be upgrading the quality of materials used.
Manufactured Stone Veneer
Sometimes called cultured stone, manufactured stone, has the appearance of natural stone, but is actually made of concrete.
It’s often used to build retaining walls and used as a form of siding to give your home an upscale appearance. It comes in a variety of colors or styles, based on personal taste, including sands, clays, slate, moss, limestone, and river stones.
Manufactured stone must be installed professionally and correctly for the sake of longevity and to minimize possible construction problems, including moisture issues, leaks, and improper ventilation. While this is a remodel that can be a gamechanger both as a resale investment and as an affordable luxury for your home, we recommend doing your research when it comes to picking materials and labor for installing your manufactured stone.
This means checking in on referrals and reviews, as well as getting a second opinion if you have any doubts.
While not technically a remodel, landscaping is one of the top three investments that can bring the largest sales returns.
Good landscaping can add 10-20 percent to a home’s value. The American Society of Landscape Architects recommends investing 10 percent of a home’s value into the landscape. This includes structural features such as lighting, fences, garden paths, fire pits, and ponds.
According to the Council of Tree and Landscape Appraisers, a well-placed and conscientiously-chosen tree sapling can cost you about a hundred dollars and grow to add up to $10,000 to your house once mature.
Those thinking of reselling soon should choose low maintenance perennials and plants that do not need a lot of care and support. Difficult plants can be intimidating for a new homeowner.
As environmental considerations continue to weigh on everyone’s mind, upgrading to an improved and sustainable irrigation system, such as an attractive rainwater collection setup, can land you big points with buyers.
In 2018, traditional patios are a sinking investment at 46.7 percent ROI. Nonetheless, homebuyers are looking for non-traditional outdoor living spaces, which can include decks or landscaped seating features.
Environmentally friendly and wellness-oriented outdoor living spaces are appealing to homebuyers. This could mean outdoor seating around a fire pit. We recommend environmentally-friendly permeable pavers, which could cost about $600 for a 100 square foot area, and a DIY or self-installed fire pit.
Wood deck remodels can easily outprice themselves, but if you stick to a budget, a wood deck of $9,000-$12,000 can have an 82.8 percent ROI.
Wood decks are a selling point to dress up a location with difficult landscape features, such as zero-scaping or rocky ground. Additionally, a nice deck can make a convincing argument for many first-time homeowners who enjoy the idea of cooking out on the grill.
While you’re tweaking the outdoors, don’t forget to add some outlets to your deck space. Seattle broker Reba Haaswrites, “Whether you want to be able to hold outdoor parties in your backyard or use a grill for summer barbecues, adding outdoor outlets increases your home’s entertainment value.”
Conversions – Plan Carefully
Conversions involve changing unfinished spaces, such as garages, attics, and basements, into living spaces.
Some conversions will not repay what you put into them, and experts even warn people away from garage conversations, since they can make homes harder to sell.
One conversion that is picking up, however, is the attic-bedroom conversion which costs about $50,000 on average, and has a 83.4 percent ROI.
Basement renovations can cost $10,000-27,000 on average, and luxury basement remodels can range to around $62,000. Finished basements that can be used as livable space, with useful outlets and a healthy dose of lighting to combat basement gloom, can recoup you around 77.6 percent ROI.
Universal (or Flexible) Design
Universal design aims to ensure that a home’s features can be used just as easily by the elderly and disabled as anyone else.
Living spaces that are usable for all abilities and ages are becoming a premium for home sales. Many families are looking for homes that will comfortably house multiple generations under one roof due to the growing senior population.
Webb explains that universal design is a consideration of aging “in place” and having a “greater awareness of people with disabilities.” Features include grip bars in showers, lever-style doorknobs, easy to operate faucets, and wheelchair-friendly doors. A universally designed bathroom, for an average of $16,400, brings an average ROI of 70.6 percent in 2018.
Other full remodels to accommodate universal design include lowering kitchen counter height and making adjustable counters. While not all houses will have single-level floor plans for homebuyers looking to age into their forever home, there is a push to have all living necessities, such as the kitchen, at least one bedroom, and a universally designed bathroom, on the bottom floor.
Going Green is Great for Everyone!
Renovating for energy efficiency can provide high returns, as new homeowners are concerned about their carbon footprint and the cost of indoor climate control.
In 2017, the relatively low-cost project of insulating the attic had the single greatest ROI nationally of any other home improvement. Loose-fill fiberglass insulation topped the chart with 107.7 percent ROI on average.
When going green, a more efficient hot water heater can produce big long-run returns, especially for those who expect to live in their house for a few more years.
About 16 percent of the energy usage of the average household is put towards the cost of heating hot water. Around $1800-$2400 spent on an efficient water heater is easily recouped between lower energy bills and an increased resale value. A heat pump water heater with a capacity of 55 or more gallons can decrease your energy bill 25 to 50 percent. And depending on your local market, the energy-efficiency of a tankless water heater is attractive to homebuyers.
Replacing old double-hung windows with high-efficiency windows offers a 73.9 percent ROI. Efficient windows keep your climate control regular and your bills low. These windows are also easy to maintain. Clean, bright windows offer your home a sense of timeless luxury.
Small Improvements with High Returns
Small improvements are more likely to grant you higher return percentages than big remodels. Small changes focus on sprucing up the home, clearing up the floorplan to allow for more open spaces, and adding to the flexibility of each room.
Whether you’re planning on being in your house for another seven years or are putting it up for sale in a month, it’s always a good decision to review your lighting.
A house’s lighting can change its entire feel. For instance, high wattage bulbs can make spaces feel larger, and soft lighting can bring warmth to empty spaces.
While it’s best to stay away from lighting that is likely to date itself in the long run, such as chandeliers and stylized sconces, pendant lights add length to the height of the ceiling and provide mid-level lighting that overhead lights cannot achieve. Dimmer switches also add sought-after versatility and can help create a mood.
“Natural lighting” is a key phrase among young home-buyers, and can be achieved not just through windows, but through tubular skylights, also known as sun tubes or light pipes.
Sun tubes consist of a globe-capped hole in the roof that then funnels light through reflective material into your home. These shine in natural light from outside, whether sunlight or moonlight, to give you multidimensional, full-spectrum light. Sun tubesgenerally cost $500 to $1,000 when professionally installed or $200 to $400 for the advanced DIY homeowner who doesn’t mind working on the roof.
Open and Flexible Spaces
Kristin Wellins of ERA Real Estate explains that “Right now buyers want a wide-open floor plan, the living room right off the kitchen. They are into big spaces.”
The biggest sellers on the market right now feature wide open and flexible spaces. A relatively easy fix to make your floorplan feel more open would be to take down pass-through walls. These are often non-structural walls that interrupt the floorplan’s flow.
You can supplement any lost storage or cabinet-space by putting in a center islands and still allow for the sense of flow because they add counter space and below-counter storage without blocking the view.
Versatile rooms allow homebuyers to envision the spaces of your home for their own purposes. For example, the same room might be a home office for a young professional, while older homebuyers might be looking for a dedicated playroom for their grandchildren.
These changes won’t add square footage to your home, but they will make it feel roomier on the inside. And when it comes down to a tour, open and versatile spaces could boost your sale price without having to increase square footage.