We’ve all heard that owning a home can become a valuable asset that helps you to accumulate wealth in the long run. Well, it’s true! With the right upgrades, improvements, and additions to your home, the value can increase by the tens of thousands.
As you make decisions regarding your home’s renovations and major projects, it’s vital to pay close attention to the market value of your home and the homes around you. Keep an eye on what homes in your neighborhood are pricing out at.
If they top out at $600,000, and yours is already worth $575,000, you may lose money if your project is more than $25,000. Always plan your renovations around your home’s current value.
A 2018 Homeowner Protection Survey by Chubb, which queried more than 1,200 U.S. homeowners about their approach to property, found that 58% of homeowners will “definitely” or “probably” undergo a home renovation or improvement project over the next 12 months. Of those who plan to do so, 65% plan to spend at least $10,000, with 20% budgeting between $10,000-40,000 and 15% spending more than that.
UPDATE YOUR KITCHEN AND BATHROOMS FOR THE LARGEST RETURN ON INVESTMENT
If you’ve heard anything about what to renovate to increase your home’s value, you’ve undoubtedly heard to start with the kitchen and bathrooms first. These two areas are the most used inside a home.
Brad Hunter, chief economist at HomeAdvisor, notes that “millennial homeowners are now twice as likely as baby boomers to tackle kitchen and bathroom remodels.”
Most people perceive bathroom and kitchen renovations as the most impactful on home resale value. Also, appraisers tend to look for updates in these areas first, due to the high appeal for potential buyers.
If you’re starting with the kitchen, begin by replacing old appliances with new, up to date models, and make sure all appliances match in color and brand if possible. Refacing or completely replacing outdated cabinets, can quickly add value to the kitchen. The same goes for counter tops, back splashes, and flooring.
For example, if you just bought a home with Vinyl counter tops in the kitchen, swapping out the material for quartz or granite will benefit you in your efforts to increase the return on your investment.
With bathrooms, complete renovations usually aren’t required. You can tackle inexpensive elements like fixtures, vanities, and toilets while still getting the look and feel of an update without breaking the bank.
ADD SQUARE FOOTAGE OR MODIFY THE EXISTING FLOOR PLAN
Most people prefer spaces that have an open floor plan. Removing a wall can instantly open up two rooms that were previously closed off from each other. It can also increase the natural light filtering into the space and provide more room to travel between spaces.
Adding square footage with a second bathroom, family room, or home office will usually lead to higher values, and that’s something buyers tend to notice.
Adding another decent-sized bedroom alone can broaden your buyer list if you sell, since many people will always consider more bedrooms than their family needs, but rarely consider looking at properties with less.
Finally, you can also focus on creating additional living space, such as finishing a basement, building a deck, or converting an attic.
CURB APPEAL MATTERS
What’s the first thing you see when you drive up to a home? The front of the house, yard, and driveway. Kind of a no brainer, right? But many homeowners completely ignore addressing the aesthetics or curb appeal of the home.
Some inexpensive renovations to increase the curb appeal of your home can include adding shutters or window wraps to add more visual appeal. Make sure the colors match the paint on the existing trim colors. Does your driveway have cracks or oil stains? Get these two problems taken care of to instantly increase the look and feel of the entry to your home.
Landscaping is an easy and affordable way to increase value. Having healthy trees, blooming flowers or plants, and manicured flower beds instantly make your home look beautiful. If you strategically plant native trees, you can reduce energy costs by as much as 50%.
Plant them in areas that will provide plenty of shade to protect areas of your home the sun hits the most. Avoid installing synthetic turf or large gravel areas, as both can increase energy costs and degrade environmental resilience.
People are showing a greater tendency to stay in the home they already have and improve it rather than moving. If you’re not sure where to start, there are plenty of home remodeling professionals and financial planners that can help guide you and create more value for your home remodeling plans.
The doubling of homeowner equity over the past six years has given people the financial wherewithal, and the confidence, to continue making investments in their homes.
For a free consultation on where to start, The NuHome Team has decades of experience and connections in the housing industry as a mortgage lender and is licensed to provide you with financial planning strategies to increase the value of your asset.
Justin Brown – NuHome Team