THE DO'S AND DON'TS OF UPPING YOUR HOME'S VALUE
Your home is one of the biggest investments you’ll ever make. Even if you’re not looking to sell it, capitalizing on that investment is a good idea by making improvements to increase the value.
Of course, if you’re going to put money into improving your home, you'll want to be smart about it - targeting the projects that'll maximize your gains. And if you are looking to sell your home or refinance it, you’ll be surprised at just how quick and relatively inexpensive the improvements that deliver the most bang for your buck actually are.
Here’s our go-to guide for getting the most out of your home without gutting it entirely:
DO: Increase the space.
If there’s room in your budget to add an additional room, an extra bedroom or bathroom will do more for the value of your home than a rec room or a sun room. You might consider giving your kitchen some breathing space by taking out a wall that blocks sightlines to living spaces. Open floor plans are popular now and taking out a non-structural wall can open up your home and maximize flow.
DON’T: Customize extra space.
Converting the garage into a man-cave or recording studio might work for you, but it has more market value in its original form. The same thinking applies to those spare bedrooms. The library of your dreams isn't necessarily part of every buyer's fantasy. And if you revamped the old play room into a wine cellar once the kids went off to college, you probably won’t see a return on that expense when your home is appraised.
THE OUTDOOR CHORE
A manicured lawn does a lot for a home’s curb appeal. If trees and shrubbery are overgrown, consider giving everything a nice trim, particularly in the front yard. Think of how the front of the building will look on the listing. A potential buyer should be able to see the façade they’re interested in purchasing, so cut back the overhanging tree limbs and the weeds growing wild.
DON’T: Overdo it.
A Japanese tranquility garden may be the backyard of your dreams, but the next owner might see the exotic flowers and serenity fountain as more trouble than it's worth. Stick to low maintenance flora that don’t rely on constant human care to stay alive.
THE HEART OF THE HOME
DO: Update the kitchen and bathrooms
These are the golden rooms that potential buyers get excited about when everything looks new and shiny. Replace tired looking appliances with newer models. Switch out the cabinet handles and knobs with hardware that didn't see its best days in the disco era. Redo the tile floors, or at least re-grout them. A renovated kitchen/bathroom is most appealing for older homes. If your home isn’t particularly old, the appliances and fixtures don’t need to be new to look new. Even a simple deep cleaning can give the heart of your home the “like new” effect.
DON’T: Think Luxury
While installing a new tub is a quick way to update your bathroom, putting in a sunken bathtub with massaging jets won’t get you much ROI. The same goes for marble floors, custom tile, and light fixtures. While they may be beautiful, luxury upgrades are not to everyone’s taste and won't pay out when you sell your home. Even if you were to refinance, you won’t see that great of an increase to your appraised value by installing a crystal chandelier versus a less showy piece.
COST vs. VALUE
So which home improvements statistically yield the greatest return on the investment? According to a study of 2014 remodeling projects by Hanley Wood, these are the renovations that retained the most and least value at sale.
THE BOTTOM LINE
It pays to be smart about the home improvement projects you tackle, especially when looking to sell or refinance. Choosing wisely can be the difference between seeing your $10,000 investment deliver a 100% return and watching that same investment deliver the same return as your cousin Vinny’s “sure thing” stock tip.