Your home’s worth may rise if you make it more energy-efficient, expand its size, renovate the kitchen or bathroom, or add innovative home technology.
According to a NerdWallet study conducted online by The Harris Poll in August 2018 among more than 1,400 homeowners, nearly two-thirds (65%) of Americans anticipate their home’s worth will increase over the following ten years.
The home value estimator by RealAdvisor optimistically suggests that several elements that affect a home’s value, such as its location and the market’s attractiveness, are outside your control.
Almost 70% of American homeowners consider taking care of your home the most valuable possession. The good news is that keeping up with repairs and making wise renovations are both tried-and-true methods of gradually raising a home’s worth.
Make it More Eye-Catching
According to James Murrett, president of the Appraisal Institute, a trade organization for real estate appraisers and curb appeal, or how your home appears from the street, is your first opportunity to make a favorable impression. A house’s exterior should entice potential buyers to enter through the front door.
Make sure the current landscaping is kept up. Consider planting flowers or repainting the front door if your yard appears dull compared to your neighbors’ yards. Concentrate on the kitchen and bathroom after the exterior has been improved. A property may not sell for its market value when these two rooms are outdated.
Additionally, you are not required to spend money on marble flooring or hot towel racks. According to Remodeling magazine’s “Cost vs. Value Report,” a basic kitchen makeover typically recovers 81% of its cost through increased value, compared to 53% for a premium kitchen redesign with stone countertops, custom cabinets, and commercial-grade appliances.
A midrange bathroom renovation, including new flooring and a few updated fixtures, generates an average 70% return on investment. Still, a luxury bathroom redesign, which includes heated flooring, bespoke cabinets, and designer fixtures, generates a 56% return on investment.
Make it Simple to Maintain
Since many buyers are concerned about purchasing a property that will require ongoing maintenance, replacing a significant part before listing your home for sales, such as the furnace, water heater, or even the roof, may alleviate concerns about a future emergency repair and increase the price you receive.
Making things simpler to clean and maintain may also raise a home’s worth. Think about installing hardwood floors instead of easily discolored carpet or vinyl siding instead of wood siding, which requires a lot of upkeep.
Improve its Effectiveness
Depending on the region of the country you live in, energy-saving features might significantly affect the value of your property. Energy-efficient mortgages (EEMs) let borrowers pay the additional debt for the home’s acquisition and energy-saving renovations. Additionally, EEMs might provide cheaper mortgage rates to boost purchasing power.
To raise house value and attract environmentally concerned purchasers, consider installing double-paned windows, improved attic insulation, LED lighting, and energy-efficient appliances. Install solar panels on the roof if you want to go a step further.
According to 39% of agents polled recently by the National Association of Realtors, solar panels raised the perceived value of real estate. Solar panels, however, only make sense if you’re expecting to raise value over the long term and not looking for an immediate bump in resale value because they need a significant financial and structural investment.
Increase the Size
Value is significantly impacted by square footage. One method to assist clients in comparing homes with comparable renovations and styles is the price per square foot.
Larger homes frequently sell for more money, and even if an appraiser doesn’t formally recognize the entire worth of the additional room, a buyer will probably notice. The most obvious option to increase the size of your home is to add a room, but you may also add living space by finishing the basement or installing a deck.
According to a Coldwell Banker poll conducted in 2018, buyers’ most desired “smart” technologies for new houses are those that increase safety. Thermostats, carbon monoxide and fire detectors, security cameras, door locks, and lighting are some of these reliable and intelligent appliances.
Innovative technology does add attractiveness even though it doesn’t necessarily raise a home’s worth. Those who consider themselves “techies” are more willing to spend extra on these things. For less than $1,000, you can typically install these devices yourself, unlike repairing the roof or remodeling the bathroom.
You can also consider upgrading your house’s amenities to attract potential buyers. On top of being a little expensive, revamping your house’s amenities can be a little tricky since you have to take into account the demographic of your target buyers and the type of property you are selling before deciding on upgrading anything.
For a family house, installing a home theatre system can make your property more enticing. On the other hand, if your prospective buyers are busy young professionals, the addition of a workout room, a video game room, or simply installing an indoor golf simulator provides your property with a competitive edge in the market.
How to Pay for Value-Adding Improvements
Make sure to ground your expectations in reality when considering ways to raise a home’s worth. Updates don’t always pay for themselves, but they can increase comfort for your family and potentially speed up the sale of your house. If you can’t pay for home upgrades in cash, make sure you choose the best option of financing for you.
- Credit card: If you can pay off the entire debt of the card within a short period, putting home renovations on a credit card can be acceptable.
- Personal loan: Take into account a personal loan if you don’t have enough equity to qualify for a HELOC or home equity loan. In most circumstances, the interest rate will be greater than a credit card but lower than a loan based on home equity.
- HELOC – Home Equity Line of Credit: In that, you receive a flat sum of money with a fixed interest rate and fixed monthly payment, home equity loans are comparable to personal loans. HELOCs, also called home equity lines of credit, function similarly to credit cards and have variable interest rates and an available credit line.