Increasing Your Home's Value
As an astute homeowner, you probably see your home as not only a place to live life, but also as one of the best ways to increase wealth through your home's equity. Thanks to the enchantment of home appreciation, which is when property value rises on its own, recent homeowners sold their homes for an average of $55,000 (29%) more than they purchased it!
However, it’s difficult to predict a home’s precise rate of appreciation, since it's based on things that are always morphing. For example: how many buyers are searching for homes, how many houses are available, and inflation. A big question is, if you will be ready to sell your house when the market is hot? A good portion of recent buyers believe they will reside in their homes for fifteen years, however recent sellers stayed in their houses for an average of nine years.
You may be wondering if it is possible to increase home worth beyond the standard equity appreciation? Absolutely! The following tips will help you gain more confidence that your house will be worth top dollar someday, and increase your home's value.
Let’s get started!
1. Add Charm and Beauty!
The first step that you can do to increase home value is to literally make your home more attractive. All of those hours of watching HGTV, and other home decor shows just might pay off. That's correct people, we’re talking about home staging! Reworking your house's decor and making your home more beautiful is definitely a great selling point for future buyers, but you will also have the benefit of enjoying a lovelier home yourself
Will home staging techniques really boost value? Let’s see what the professionals think:
- 22% of home sellers’ agents said that staging a home increased the value offered by buyers 1% – 5% , compared to similar homes that didn't partake in home staging changes.
- 17% said home staging increased value by 6–10%.
If your home is worth $300,000, there’s a chance that following home-staging suggestions and tips may help raise your home's value by $3,000–30,000.
Nonetheless, be smart and don't overspend on projects for the sole purpose of increasing home value. Have in mind, that even if your home decor transformation doesn't bump up your home's value, you will enjoy the new changes to your home regardless. It's still a win!
Deciding which room should be tackled is the next question. Here is what other recent homeowners have worked on:
Living Room (93%)
Kitchen (84%)
Dining Room (72%)
Master Bedroom (78%)
We will use the kitchen as an example of how adding beauty can raise home value. A minor kitchen remodel will cost about $23,000. That includes updating appliances, cabinets, sinks, countertops and flooring. This project usually regains more than 80% of what was spent, which means you may add more than $18,000 to your house's value. That's not bad!
Now, what about the exterior of your home? That’s correct— it's also possible to increase value by creating some curb appeal! Here are some cost and return averages on the following projects:
Deck Addition (wood)
Job Cost: $13,333
Cost Recovered ($): $10,083
Cost Recovered(%): 76%
Manufactured Stone Veneer
Job Cost: $8,907
Cost Recovered ($): $8,449
Cost Recovered (%): 95%
Grand Entrance (fiberglass)
Job Cost: $8,994
Cost Recovered ($): $6,469
Cost Recovered (%): 72%
Siding Replacement
Job Cost: $16,036
Cost Recovered ($): $12,119
Cost Recovered(%): 76%
2. Create More Space
Larger homes tend to sell for more money. This may seem like an obvious point to make, but please hear us out. The recent median price for the size of a house was $130 per square foot. That amount held steadfast for both small and large homes, so adding square footage can add value!
Take an observant look around your home. Could you possibly knock out some walls and open up space to make the house feel bigger? Is there any area in your home where having another bathroom would make things a hundred times easier and efficient?
Please remember that home renovations can sometimes cost you more than the resale value. For example, say you want to take on a midrange bathroom addition with a fairly nice shower, sink and toilet. Doing that might add almost $29,000 to your house’s value. However, the cost of getting the project done may be nearly $48,000. More than likely, you won’t get back all the money that you spent, but that’s still more than a 60% return. That really isn’t too bad, especially if you plan to live in the home for a while to enjoy the new addition.
Make sure the space you add to increase your home value is worth it to you and your budget.
Keeping the example above in mind, suppose you have a $200,000 house, and you save up $48,000 to add a bathroom. According to the data, your house would then be worth $229,000. If the house was sold too soon after that, then you would lose $19,000. Instead, you should stay in your home until it appreciates enough to make up for the loss. It gets tricky to predict. Even recent sellers who lived in their homes for eight to ten years made $35,000 (17%) more on their homes, than what they first paid for them. If you lived in your home for around that amount of time, and sold it during similar market conditions, then you might earn back almost double the loss of the $19,000!
3. Add Efficient Energy Value
Let's face it, you might think that adding energy efficiency isn’t the most exciting way to increase your home's value. Nonetheless, it increases home value, and that’s why we’re here. About 70% of real estate professionals said that promoting energy efficiency in home listings was valuable.
Now, which energy efficiencies should you possibly update and focus on to build home value? Recent homebuyers found the following environmentally friendly features to be the most important:
Heat and Cooling Costs (33%)
Windows, Siding and Door installations (29%)
Energy Efficient Lighting (23%)
Energy Efficient Appliances (21%)
Landscaping for Energy Conservation (10%)
Solar Panels Installed on Home (3%)
Consider upgrading around ten of your house's windows to be more energy efficient. If you decide to go with a vinyl window replacement, then that could put you just under $17,000 in the hole. However, the value of the windows would likely earn you more than a 70% return on what you spent. That means your home value might increase by more than $12,000. In addition, you will save money on utility bills!
4. Update Systems and Appliances
Another way to present your home as more valuable is by easing a buyer’s mind when it comes to home maintenance issues. How is that accomplished? Make sure all the systems and appliances in your home are fully functional and up to date. Assess everything around the house. Is the air conditioner making a clanking sound? If yes, then fix it. If a plumbing line is leaking, then fix it too.
If the water heater is older than dirt, then purchase a new one. If the roof has seen better days, then replace it. A midrange roofing replacement with asphalt shingles might cost a little more than $22,000, but it can boost your home's value by more than $15,000—that’s over a 68% return on your new roof investment!
5. Enhance Your Home With Technology
If you are a technology geek, then you are going to love this suggestion. Americans are getting more interested in purchasing homes that come with gadgets and gizmos. In fact, a recent survey found out which smart home products were preferred by homebuyers to have preinstalled, if they were to buy a home in the next year:
Smart Thermostats: 77%
Smart Fire Detectors: 75%
Smart Camera: 66%
Smart Lock: 63%
Smart Lighting System: 63%
Smart Carbon Monoxide Detectors: 70%
Tune into your tech-geek radar the next time you are at the electronics store. Who knows, you just might find a deal to upgrade your home with smart technology!
Do You Want More Home Value Wisdom?
Now you have the best ways to increase home value in your tool belt. To acquire even more tips on getting the highest value for your home, especially if you are planning on selling soon, seek advice from a local Licensed Real Estate Agent.
All data is from a national assessment and credited to Ramsey Solutions.
