Inherently there is only one reason to want to increase your homes "value" and that is if you are trying to sell it. This said, there are many intrinsic reasons to renovate a home e.g. personal preference, personal feelings, personal satisfaction, improve living area etc... When doing things for a personal reason the goal isn't necessarily to increase the value of the property but to increase what you value in your property. For this article we will keep the focus on increasing a home's value for resale. Projects impacting a homes value range from the very expensive (major remodels and additions) to free (tidying up the front yard).
Before you begin any project, it is important to keep 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 10 to 15 percent of your neighbors’.
Here is a list of commonly undertaken projects to increase a homes value and the approximate percentage of the total project cost recouped at sale:
Minor kitchen remodel (88%)
Bathroom remodel (85%)
Major kitchen remodel (81%)
Family room addition (80%)
Deck addition (77%)
Master suite (75%)
Attic bedroom (74%)
Siding replacement (73%)
Window replacement (69%)
Home office (55%)
Looking at these another way, if you spend $10,000 on a minor kitchen remodel, you will be adding $8,800 to the value of your house. Remember adding value is a tricky business. What seems to be value to you may not appear that way to any given prospective buyer.
Here are some tips when attempting value-increasing remodeling:
1. Remodel with mass appeal in mind. Potential buyers are usually attracted more to neutral, mainstream design.
2. Don’t go cheap (remember inexpensive is different than cheap) when it comes to construction. Use durable, quality materials. If you’re a do-it-yourself-er, honestly evaluate your ability to do it right.
3. 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.
4. Turning a bedroom into a bathroom is a mistake – it reduces the number of bedrooms, which can be a chief selling point.
5. Don’t do a $30,000 single project e.g. kitchen remodel in a $100,000 house – unless you plan to continue living there, you will not see the return on your investment.
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 and inside 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.
Have a project you have questions about? We would be happy to discuss it with you in relation to your home's value just give us a call: 801-540-5867