Adding a home addition is one of the best ways to boost your home’s value. It doesn’t matter if you’re a first-time seller or a seasoned real estate investor. Whether you’re planning to sell sooner or sell later, it’s a good idea to consider the ROI of potential home improvements.
But which ones should you make?
The key is to understand the actual value of whichever one you’re considering before you spend your time and money.
With that in mind, here are some things that can help boost a home’s market price…
Verify the ROI on the Home Improvements You’re Considering
Some home improvements offer better returns on investments than others. If your primary goal is to boost your home’s value, then ROI should be your main consideration.
Calculating the ROI on a home improvement isn’t an exact science. The money you put into a project may yield a bigger boost to your home’s value than you expect – or the payoff may be less than what you hoped when it’s time to sell.
The value of any home improvement can be affected by a number of factors. Some improvements might put your home into a price range that’s too high for your area. Others might simply not have a persuasive impact on buyers.
It will be helpful to consult with a local real estate agent to get an idea of which improvements will earn you the biggest ROI.
Remember that you won’t always recoup the full value of every improvement you make when it’s time to sell your home – but the suggestions below will more than pay for themselves.
Which Renovations Will Increase My Home’s Value?
When you’re evaluating potential home renovations to boost the value of your home, think about them from a buyer’s perspective.
What’s valuable to you might not be as valuable to someone else. Here are some ideas to help you increase your home’s value.
Make Improvements that Improve Curb Appeal
Most real estate agents will tell you that improving a home’s curb appeal is a must. Here are some improvements that can really pay off when it’s time to sell your home:
- Landscaping improvements (planting flowers, etc.)
- Adding a new walkway
- Sprucing up planters
- Replacing the front door
- Painting the exterior of your home
These renovations are generally quick and easy fixes that can make a BIG impact when a potential buyer sees your home. First impressions matter.
Make Your Home Look Bigger
You may not be able to add additional square footage to your home, but you can make it look bigger.
Here are some home improvements that can make the interior of your home appear more spacious than it is:
- Paint the walls in light, neutral paint colors
- Replace dark drapes with sheer curtains
- Replace dark carpet with hardwood flooring
These simple changes can dramatically improve your home’s appearance.
Gut Your Home
When a potential buyer tours your home, they’re likely to ask questions about the innards of your house. While the appearance of a home is important, things like plumbing and electrical wiring are likely to be big concerns with your buyer.
Here are some “gut” improvements to consider:
- Replace old pipes with new PEX pipes (It’s less expensive than you might think!)
- Replace faulty or dated wiring and update lighting fixtures
- Add lights with dimmers
- Update your HVAC system or add insulation
Anything that improves your home’s energy efficiency will add to its value. And it’s always nice to be able to tell buyers that the plumbing or wiring is new.
Make Your Home More Modern
Sometimes it’s the small things that make your home look old and unfashionable. Updating them can make a big difference in the way potential buyers value your home.
- Refinish popcorn ceilings and textured walls
- Remove wood laminate paneling
- Replace dark or dated carpeting in the living room
You’ll be amazed at the difference these minor modernizations can make.
Kitchens and Bathrooms
One of the most valuable changes you can make to your home is updating the kitchens and bathrooms. Here are some suggestions:
- Update your lighting fixtures
- Grout the tile on the floor and in the shower
- Replace faucets and fixtures
- Replace outdated linoleum floors with tile
- Buy a new bathroom mirror
You don’t need to redo the entire kitchen or bathroom to increase your home’s value. In fact, full remodels are likely to earn you a lower ROI than doing some simple sprucing up.
Home Improvements That Might Not Be Worthwhile
We’d be remiss if we didn’t mention that some home improvements are less worthwhile than others.
That doesn’t mean you can’t make them. It just means that you should be realistic about your ROI if you decide to make these home improvements. Some things are worth it for the financial value and others are for your personal enjoyment – after all, it’s your home!
With that said, here are some home improvements that you might want to think twice about undertaking:
- Adding backyard patio or deck to your home might seem like it would add a lot of value, but the ROI is likely to be half of what you spend.
- Master bedroom additions usually cost too much to be worthwhile.
- Wallpaper can be attractive, but paint is a better choice when you want to sell your home.
- Repurposing a bedroom as an office or combining two bedrooms may reduce your home’s value instead of increasing it.
- Adding a swimming pool results in only a 7% increase in a home’s value.
If your main goal is to increase the potential selling price of your home, then these home improvements might not be the best places to put your money.
The Best Additions for You
Home improvements that make your home more appealing, feel larger, or improve its energy efficiency are desirable to home buyers. The best home improvements for increasing your home’s value are ones that will impact a buyer’s perception of your home.
Now that you know which home improvements are sound investments towards your next home and beyond, you can consider your options. But remember: at the end of the day, the best home upgrades are the ones that are most worthwhile to you.