Every homeowner – whether you just purchased your home or have been living in it for 20 years – knows that there is always a list of projects to be done. From installing a new water heater to remodeling the kitchen, the list is always evolving.
And, with so many projects to tackle, you may want to consider whether the projects on your list will pay off in terms of the resale value of your home – even if you’re not currently planning to put your home on the market. Financially, home improvements can fall into two broad categories: necessary and nice to have. The necessary home improvements are more “maintenance” type improvements, a new HVAC system, fixing a leaking roof, and updating electric or plumbing to name a few. These are the improvements no homeowner wants to make, but they expect these areas of the home to work properly. Larger remodeling projects, such as installing granite countertops and new cabinets are typically “nice to have” improvements, and more fun to plan as a homeowner.
Not all home improvements – big or small – will pay off in terms of the resale value of your home. What you’ll get back typically depends on the value of your home, the cost for and quality of the improvements, the value of the houses in your neighborhood and how soon you sell your home after making the improvements.
If you’re not soon planning to move, it may be best to spend your money in a way that you will enjoy it most – while keeping up with the maintenance projects, of course! For you, these home improvements are about being able to love and use your space every day. Even if you get less than a 100% return on your investment when the time comes to sell your home, the project will be worth it simply due to the value of your enjoyment of the space.
That said, if you’re trying to plan projects with the resale value of your home in mind, check out the below for a few that may add value to your home.
Let's get the nitty gritty out of the way. Unfortunately owning a home isn’t all new kitchen countertops, decor and paint colors. At some point, you may have to replace your HVAC system or water heater, fix a burst pipe, or replace the roof or siding to your home. Not only is maintenance important for the health of your home, prospective buyers expect that the home they choose doesn’t require any of these updates. In other words, knowing the roof needs to be replaced may be a bigger issue for a potential buyer than living with a functional but dated kitchen. In other, other words, you’re more likely to see a return on investment for basic maintenance, even with the dated kitchen. In addition to replacing the roof or siding, other maintenance projects that might need to be done include:
Replacing windows to more energy efficient models
Fixing moisture problems in a basement
Converting carpeted floors to hardwood
Refreshing the look of your home with fresh paint, outlet covers and crown molding
Kitchen and Bathroom Remodel
The kitchen and the bathroom are two rooms worth investing in. Both are areas of the home where people spend time and are areas that you can tell if money has been spent or not. If you’re remodeling the space for you to use for years to come, make sure the layout and style are a fit for you, your family and your lifestyle. If you have the resale value of your home in mind, it may be best to think more traditional in terms of the remodel. Stick with neutral colors and wood cabinets for a greater return.
While these rooms certainly see the best return on investment, its also a good idea to consider your home in comparison to other homes in your neighborhood. For example, if you live in the only one bath home in the neighborhood, you may see a better return if you add a second bath instead of remodeling the one you have.
First impressions are everything in life – and homeownership. If you are looking to sell your home and potential buyers drive by and are not impressed with the exterior, they may be less likely to walk inside. If you aren’t looking to sell anytime soon, the exterior of your home will still set an impression for visitors, and you want your home to feel welcoming. Landscaping, trim and a freshly painted front door can work wonders for enhancing the curb appeal of your home. To add pops of color, consider putting decorative planters on your front porch or walkway.
Adding space, like another bathroom or additional living space, may prove to be a worthwhile investment. Sometime adding space, like remodeling a basement or adding an addition with more living space may be cheaper that purchasing a new home but be careful not to add so much space you’re pricing your home out of the neighborhood.
Additionally, you may want to build a specialty space in your home, like a wine cellar or in-home theatre. These additions may not be about the resale price of your home, but instead about enjoying your home. In this instance, the enjoyment you experience by and in the space may be more valuable than receiving a 100% return on investment, and that’s totally worth it.