Adding value to your home
Whether you're preparing to sell or just want to make some updates, you can add value to your home with minor repairs or major renovations.
Tips for popular updates
According to the National Association of Home Builders, Americans spend more than $150 billion a year on home remodeling. Most people expect to recuperate 80 to 90% of their costs with the sale of their house. Even in the tightest of markets, renovations and repair increase a home's overall value and attractiveness to potential buyers. However, knowing what to focus on and spending money wisely is essential to seeing a gain in value.
Kitchen and bathroom
When renovating a home, kitchens are at the top of the list. You can expect 75% to 100% return on your investment if you do it right. Instead of tearing everything out and starting from the studs, consider simply reconfiguring the workspace with an island, buying new appliances or updating the lighting with task and accent lights. Keep it simple though—you won't get your money back out of certain updates, like high-end designer appliances.
Bathroom remodels can be just the opposite. While bathroom remodels can increase the appeal of your home, you shouldn't expect to recover its full cost when selling—only about 40% to 60%. It may be in your best interest to make sure everything is in working order and clean. Re-tiling an existing shower or bath, or replacing fixtures, can be money well spent.
Floors are part of the first impression of a home, but they're also one of the first things many buyers will want to change. Instead of spending thousands replacing carpeting, check to see what shape they're in—they may just need a good steam cleaning. Replacing carpet with hardwoods may seem to be the trendy thing to do, but it may not appeal to buyers' tastes—you may be wasting your money.
Painting is a cheap and easy way to give your home a fresh, clean feel. However, rather than painting the entire house, focus on high-traffic areas such as the kitchen or living room. Using neutral colors will help buyers envision the space as their own.
Windows, roofing and siding
Many people consider replacing older windows with high-efficiency ones. While that might be a selling feature, it won't add much actual value. Save money by checking frames to make sure they're clean and free of drafts, and repair or replace as needed. You'll get more bang for your buck with a new roof or siding—not only with improved energy efficiency, but also resale value and attractiveness.
Curb appeal is always important for a first impression. A well-maintained yard adds value, but elaborate landscaping can deter buyers who envision spending their weekends having to do yard work. A deck or patio is a great way to extend the living space of a home with just a fraction of the cost of a room addition. Adding a pool or sports area may appeal to your family but you most likely won't recuperate the expense.
The bottom line
Keeping on top of issues such as rotted siding or leaky plumbing is essential to maintaining your home's overall value, but it doesn't offer much in the way of added value—potential homebuyers expect everything to be in good shape.
While planning your renovations, focus on what's important to buyers but don't over-remodel. It's important that it stands out because of the carefully planned updates you've made—not a hefty price tag that dwarfs others in your neighborhood.
Insuring your improvements
Make sure you have the right amount of protection for home upgrades and renovations.
Loan, line and refinance
Choose your best option to unlock the power of your home's equity to pay for major expenses.
The importance of a budget
Learn how to create a sensible budget that fits your needs.
Savings nest egg
A financial cushion can provide future peace of mind.