How to Increase Your Home's Value
One of the most common questions we get from our recent home buyers is the question on home renovation: What home renovations can I do to increase my home's value?
Keep in mind, there is really only one reason to try to increase the value of your home: if you’re trying to sell it. If you’re not, deliberately increasing your home’s value most likely will increase your tax bill as well. There are ways to increase your home’s value for resale that range from the very expensive (major remodels and additions) to free (tidying up the front yard). We’ll look at the whole range, noting how much value is added when possible.
Before you begin any of these projects, it is important that you do them with the following in mind: you do not want to raise the value of your property too far above others in the neighborhood. Why? Because people who want expensive homes will shop exclusively in higher-value neighborhoods. If you own the “best house” in the neighborhood, it is unlikely you will recoup whatever investment you’ve made. A good rule of thumb: keep the value of your property within 15 to 20 percent of your neighbors’.
The following figures appeared in the December, 2015 issue of Realtor Magazine. They list the top twenty remodeling projects undertaken to increase a home’s value in the United States and what percentage of your remodeling investment is recouped at resale.
Project (average cost recouped, national):
New Master Suite (53%)
Kitchen Upgrade (67%)
Complete Kitchen Remodel (67%)
Bathroom Renovation (58%)
Add Bathroom (52%)
Basement Conversion (69%)
Attic Conversion (61%)
Insulation Upgrade (95%)
Closet Renovation (57%)
New Wood Floor (91%)
Hardwood Refinish (100%)
New Steel Door (75%)
New Fiberglass Door (60%)
New Garage Door (87%)
New Vinyl Siding (83%)
New Fiber-Cement Siding (79%)
New Roof (105%)
New Vinyl Windows (80%)
New Wood Windows (58%)
Please note, these are national averages, so in our area, the figures may be lower or higher. To explain, if you spend $10,000 on a minor kitchen remodel, you will be adding $6,700 to the value of your house. Remember that it’s a tricky business, trying to add value to your home. What seems to be value to you may not appear that way to any given prospective buyer.
Projects that may increase your home’s value include: central air; granite counters; stainless appliances; security system; sprinkler system; substantial out buildings such as a two-car garage or finished workshop; finished basements and vaulted or trey ceilings. Think twice about the following projects however, as they may not add value to your house: above-ground pool; ceiling fans; garden pond; and light fixtures.
Some tips when attempting value-increasing remodeling:
- Remodel with mass appeal in mind. Potential buyers are usually attracted more to neutral, mainstream design.
- Don’t go cheap when it comes to construction. Use durable, quality materials. If you’re a do-it-yourselfer, honestly evaluate your ability to do it right.
- Don’t remodel in a different style from the rest of the house. Additions and improvements that look “tacked on” may detract from a home’s appeal.
- Don’t do a $30,000 kitchen remodel in a $100,000 house – unless you plan to continue living there. It is a waste of money.
Always great to consider improvements that increase your home's value or prolong your home's life, including: a fence, driveway, a new room, addition, garage, porch or deck, built-in appliances, insulation, new heating/cooling systems, a new roof, landscaping, etc.
If you don’t have the kind of money it takes for even minor remodeling, there are low-cost ways to increase your home’s value. At the very least, the following things will make your home more attractive and inviting to prospective buyers.
Make sure the outside of your home is spic-and-span. Clean out the gutters. Wash the windows and remove cobwebs and bugs. Trim the hedges, cut and edge the lawn, sweep the sidewalks and driveway. Plant some colorful flowers out front. The reason for these small things is simple: If two similar homes in the same are area are both for sale, the one with the cleanest and most appealing front yard will sell first.
You may want to add to or improve your landscaping while you’re at it. According to a study conducted by Money Magazine, landscaping may be the best investment to improve a home's value. The study found that well-planned, attractive landscaping was estimated to have an actual recovery rate 100 to 200 percent higher than a kitchen or bathroom renovation.
If you are considering a home renovation project, please know that the Stephanie Salerno Team is here to help! Please call us for a consultation that may make sense for your home so that we can help you to maximize your dollars. Or, we would be happy to provide a great recommendation to a local contractor who can help - we work with some of the best in the area!