How Renovations can Increase the Value of Your Home
- Comments Off on How Renovations can Increase the Value of Your Home
In the United States alone, people spend over $300 billion a year on renovations alone. To put that into perspective, that’s 4x what we spend on summer vacations. In this guide, we’ll show you how to best spend that money to increase the value of your home.
It’s clear that people see value in home renovations, but not all projects are created equal. Some are geared towards improving resale value, giving you fantastic return on investment. Others are more about enhancing our living experience. For us, however, it’s all about ‘bang for your buck’ DIY renovations.
For those of you that get excited about getting your DIY tools out of the closet and dusting them off, these home renovations are for you. They won’t cost much in terms of dollars spent, but you’re going to need to use plenty of elbow grease. But before you start, ask yourself it’s wiser to hire a professional.
Color Scheme ($200-$300)
The easiest of the lot, and one that can be done even by the DIY novice. According to a 2017 Houzz survey, over two-thirds of real estate experts recommend you do it. According to analysis by Money.com, choosing bold colors such as powder blue and periwinkle can add more to your home value than the traditional neutrals such as white or eggshell (of course, bear in mind that correlation does not equal causation).
The decision to DIY this project is a no-brainer, considering how easy it is to do and the cost savings. By having a browse on Angie’s List, we figure hiring a professional can cost you anywhere from $600 to $800, not including the paint (which will cost $30-$60 for a 10×12 foot room).
Landscape ($300 minimum)
We’re ramping things up quickly here. Landscaping is definitely more challenging than applying a lick of paint, but it still fits comfortably within the confines of DIY. And it can give you great ROI, with a $330 fertilizer and weed control application project returning $1,000 at resale.
Steel Entry Door ($250)
According to LifeHacker, the steel entry door is the best bang for your buck DIY investment. If you hire someone to do it, you’re looking at a 101.8% ROI. Do it yourself? That ROI jumps to 501%. Not bad. The Home Mender shows you how it’s done:
Replace the Broken Stuff
It’s not a sexy renovation project. It’s not even a project in its own right. But it’s important nonetheless: fixing all those tiny little problems dotted around your house. The reason for this is that they’re going to be picked up in a home inspection. Too many of them, and people are going to turn away. Here are some easy ones:
- Fix leaky valves. No one likes a risk of a leak. Or terrible flow rates. For this reason, replace using the right ball valves. This ensures water flows when you need it and at a rate that comfortable for showering and using the kitchen.
- Spruce up the exterior. Broken fence? Weeds all over the garden? Paint that’s peeling off? It’ll turn off prospective buyers. It’s an easy fix, so no excuses here.
- Get rid of mold in the bathroom. If people walk into your bathroom and smell the damp and see a bunch of black mold everywhere, they’ll turn around and walk away. Get rid of it.
You’ve exhausted your DIY skills. Or you’ve broken something and realized it’s time to hand things over to the professionals. The following professional projects will give a lower overall return, but are still worth doing.
This one is one of our favorites, as it basically pays for itself. The ROI is nearly 100%, increasing the value of your home by the same amount you put in. You’ll also see greater interest in your property, while having a better garage door is just a nicer experience when you head off in the morning.
We don’t recommend it (it’s not for the faint hearted!), but you can also DIY this one if you’re really confident in your abilities. You can slash over $1400 off the cost price, increasing ROI to 235%.
According to Dave Ramsey (host of The Dave Ramsey Show, author of several New York Times best sellers, and general real estate guru), a minor kitchen remodel can deliver an ROI of almost 81%. Not amazing, but it’s worth noting: 80% of homeowners see the kitchen as one of the most important rooms in a house. In other words, having a nasty and old kitchen will drive buyers away.
Our advice? Stick to a nice and simple remodel. Paint and refinish cabinets. Get a new set of tiles. Vinyl flooring is a good option to increase aesthetic appeal without breaking the bank.
Renovations that Can Decrease Property Value
We’ve covered the renovations that will add value to your home. However, it’s almost as important to avoid certain jobs that will turn that price downwards:
- Lavish lighting. A lot of people love unique lighting fixtures. We’re talking fancy ceiling-mounted lights that wouldn’t look out of place in a Victorian movie. The problem? People don’t like ostentatious designs that take over a room. Give buyers space to add their own personality without having to spend money to undo your work.
- Swimming pool. Another luxury addition that can work against you. Contrary to popular belief, a lot of parents don’t want a swimming pool (it’s a safety hazard). While others want something that’s low maintenance.
- Weird room layouts. We always tend to think that adding rooms is a surefire way to add to your property’s value. And that’s usually true. But it doesn’t always pan out that way. If you don’t have a logical way of partitioning rooms, don’t do it.
Not Just About the Dollar Value
We end this guide with an important point: renovations aren’t just about increasing the dollar value of your home. You may have asked yourself this when looking at the professional renovations, considering most don’t even hit a 100% ROI. Before you start throwing tomatoes at your screen, hear the argument out:
In addition to trying to get the highest price possible on the sale, you also want to sell your house in the first place. Some of the renovations give a (relatively) low return in terms of direct house value ROI, but can be the clincher between a sale and your prospect going somewhere else. If you’re in a slow market (and let’s face it, the economy isn’t exactly running on all cylinders yet), you absolutely need an attractive home to draw someone in.