CAREY CHESNEY / APRIL 19, 2022
If you are thinking of selling your home, the first question you probably will ask yourself is “how much money can I get?" The second question is “how can I get more?” Understanding how to increase home value is how smart homeowners get the most when it’s time to sell real estate.
Even if you aren’t thinking of selling and just want to make some home improvements to enjoy while you live in your house, knowing how to increase home value will help you make the right renovations. After all, increasing the value of your home doesn’t only pay off when you sell it. Understanding how to increase home value for appraisal can help with getting a loan as well.
Regardless of your motivations for sprucing up your current abode, being in the know when it comes to how to increase home value is never a bad idea. Here are some great ideas to consider that will make your home more valuable while you live in it and when it’s time to sell.
1. Boost Curb Appeal
You never get a second chance to make a first impression. When guests or potential buyers are coming to see your home, the first thing they see is the outside. If the first impression of your home isn’t quite to your liking, fear not. There are many different ways a homeowner can boost the curb appeal of their home.
Curb appeal can be improved through landscaping or the exterior of your home and both can have a big impact. Let’s take a look at a few ways you can enhance each.
To determine what needs a bit of TLC, walk outside and examine your home. Make sure your mailbox is in good shape, your front door looks freshly painted, and your pathways and gutters are clean. Check out your windows and siding. Are they cracked or chipped? Has the color faded from the sun? Don’t forget about the garage either when you’re doing your initial analysis.
Pay attention to detail, because potential buyers (and sometimes even guests) will be paying close attention too. Remember, this is the first impression of your home, so you need to make sure it sparkles.
Improving your home’s exterior can have an outsized impact when you’re ready to sell. Take one example: You may recoup 91.4% of the cost of updating your home with manufactured stone veneer, according to Remodeling magazine’s Cost vs. Value 2021 report.
If you’re looking to swap your siding with manufactured stone veneer, it will cost $11,066 on average. But keep in mind, the average resale value increases by $10,109 – meaning you could recover almost all of the renovation costs when you sell.
Before their eyes even get to the exterior of the home, potential buyers and guests are looking at the landscaping. It's the very first thing they notice when it comes to curb appeal. Check out your lawn, trees and shrubs. Are they vibrant and green or withering and brown? Once you assess the situation, consider making the following improvements.
2. Consider A Kitchen Or Bathroom Remodel
The look and feel of your kitchen and bathroom are some of the most important factors for home buyers searching for homes. If they are well planned out with nice finishes, you might find multiple home searchers falling in love with your house. If they are dated and not very functional, it can turn a huge swath of buyers away.
A kitchen remodel, including new cabinets, countertops and appliances, can help turn an outdated mess into the focal point of your home and is the single most important attraction for prospective buyers. It can also serve as the best gathering place in the home while you live there. If done correctly, remodeling your kitchen can change the entire feel of your home.
“We always recommend open concepts to homeowners considering a kitchen remodel. An open concept creates harmony within adjoining spaces and increases the overall functionality of the space for homeowners to grow in with their families,” says Larry Greene, president of Case Design/Remodeling in Indianapolis.
While open kitchen layouts are extremely popular and tend to give homes a more spacious feel, not every home and budget can accommodate one. There are easier improvements you can make that don’t require a complete reconfiguration of your kitchen’s floor plan.
“If your home has older Formica or outdated granite patterns, typically a few thousand dollars (under $3,000) can modernize your countertops for a new feel,” says Pantazes. “I also recommend adding a simple, clean backsplash. Subway tile is VERY inexpensive, and it is very on trend right now.”
Keep in mind though, kitchen remodels are not usually cheap.
With so many potential changes, the numbers can add up. Raf Howery, CEO and founder of Kukun, the largest database on home improvement data and issued renovation permits in the country, has used his company’s national cost estimator to provide some insight into what you can expect.
Although prices always depend on finishes and size, he says, “The average cost for a medium-size kitchen is a little over $33,000. However, the range can go from $17,000 to $52,000. This does not leverage costs of very fancy kitchens, which can fetch $150,000 in some places. Expect to recover about 60% of your cost if you turn around and sell.”
A bathroom remodel can have nearly the same effect. Depending on when your home was built, the bathrooms might be outdated or dingy. Transforming them into sparkling, contemporary spaces with a well-planned bathroom remodel can go a long way.
We spend more of our lifetimes in the bathroom than we care to admit. So if you’re thinking about improving any room in your home, a bathroom remodel may be a good place to start. Bathrooms do not have to be works of art, but they should give off the impression of being clean, spacious and up to date.
So, what will help you make your bathroom more inviting?
Pantazes says, “Tile, tile, tile – put it in the shower from the tub to ceiling. It costs a little more but completely elevates the bathroom over a prefab insert. It is easy to update the hardware and with many drop-in vanities, you can change the feel of a bathroom in a day or two.”
If your floors and walls are nicely tiled, you may want to consider replacing the countertop in your bathroom. The countertop is one of the most conspicuous elements of the room, so a new one will have an instant impact on the look and feel of your bathroom.
“For homeowners considering a bathroom remodel, we recommend installing this year’s countertop of choice – quartz. Not only does it have a clean look that will fit into any bathroom design, but it’s much easier to clean and maintain,” says Greene.
So, what's the bathroom remodel price tag?
“It depends on size and finishes, but the national average cost for a medium-size bathroom is $26,300 but can range from $12,000 on the low end to $41,000 on the high end. Again, a high-end luxury bathroom can top the $100,000 mark,” says Howery.
3. Paint Your Walls
Sometimes the word “renovation” can turn people off from making changes to their home. It sounds complex and expensive, right? The truth is, some renovations don't require much time or effort at all. If you are looking for a cheap and quick fix for a room in your home that you're not too thrilled about, simply paint your walls.
“It is valuable to repaint walls because it covers dents, dings, markings and nail holes. Painting adds a look of freshness and newness that an older home may not have without it,” says Robyn Flint, licensed REALTOR® and home insurance specialist at Expert Insurance Reviews.
In the planning phase, be careful about the colors you choose. Dark colors tend to make rooms look smaller, so avoid them in rooms that don't get much natural light. Lighter grays and beiges can lighten rooms and make them look bigger. Plus, they may appeal to more potential buyers.
Painting may not seem to add a lot of value to your home, but it tends to have the best return on investment because it costs far less than other home improvements.
“With the average 2,500-square-foot home costing about $8,000 to paint inside, this means that for about $800 in paint and materials, you can have a freshly painted home if you have the time, patience and motivation to do it yourself,” says Paige NeJame, owner of CertaPro Painters in Boston.
4. Make Your Home Smart
Smart home devices come in many shapes and sizes. From a small smart speaker to a complete home security system and everything in between, the options are plentiful. Upgrading the technology and gadgets in your home can make your day to day life more enjoyable while at the same time adding value when it comes time to sell.
In a recent Coldwell Banker survey, about two-thirds of home buyers said they prefer to have these smart products pre-installed:
Installing these tech upgrades might cost a little upfront, but they pay off when you sell. Here’s what home buyers might spend on average to buy and install these new pieces according to HomeAdvisor:
5. Finish Your Basement Or Garage
One of the first things home buyers look at when perusing houses online is the overall square footage. To bump up this stat in your house, you may want to consider finishing your basement or garage. A finished basement or garage not only adds to the overall size, it can also increase the number of living spaces, bedrooms, and bathrooms. Finished basements and garages are also major plusses for buyers because they can double as extra storage space or as a home office or gym.
Homeowners typically spend between $13,600 and $18,400 turning a basement or garage into a living space. The price tag varies depending on your exact plans, labor, materials and where you live.
6. Think Energy Efficient
Home buyers are looking for energy-efficient homes to save on energy costs and leave a smaller carbon footprint. According to the National Association of REALTORS®, these are the most important features home buyers are looking for:
A home energy auditor can help you identify ways to make your home more efficient. The consultation costs about $417 on average, but it can pay off when you save money on energy costs.
How Do Home Improvements Project Increase Value?
The value of your home can be measured in two key ways. The monetary value becomes clear when you sell or have an appraisal done. The other measure, which is harder to quantify, is how happy you are in the home. With a sound renovation plan, you can increase both of these values.
Home improvement projects like the ones outlined here can increase the eventual resale value of your home. The right improvements can make a home stand out from comparable homes in the area to potential buyers and increase your asking price and overall sales price when you close the deal. Home buyers tend to like newer finishes, so the more you upgrade, the more interest you will have.
Feeling Of ‘Home’
Home improvements not only affect the financial value of a home, but also the personal value. Getting that “feeling of home” means updating your house to meet the daily needs of you and your family. It also means incorporating the aesthetic touches that bring you joy when you look at them each day.
How To Fund Home Improvements That Increase Value
As you can see, the opportunities to make home improvements that add value to your home are plentiful. Unfortunately, they aren’t free. If you don’t have cash on hand to pay for them, a cash-out refinance, a home equity loan or a HELOC are a few of the loan types available to you.
By using the equity in your house to secure a home improvement loan, you may be able to finance all the work you need to turn your property into the home you’ve always dreamed of living in.
The Bottom Line
Home improvements that add value mean more money when you sell and more joy while you live in your home. When you understand how to increase the value of your home, you are setting yourself up for success now and in the future. Ready to learn more? Check out the Rocket HomesSM Home Seller’s Guide.