Most appraisers have stories of homeowners irate over the fact that the special remodeling job they performed added zero value to their home. The imported Italian tile you used in your entryway or the pool in the backyard may be of immense value to you while you live in the home, but unfortunately they aren’t items that buyers shopping in your neighborhood value.
To get the most bang for your home improvement buck, consider these 10 best home improvements:
1. Indoor Systems
Before you consider cosmetic improvements and even functional improvements (such as adding additional square footage) to the home, make all needed upgrades, repairs or replacements to the home’s major systems. Buyers want assurance that these basic items are in working order and won’t need to be replaced or repaired in the near future, an issue that will most likely be addressed in the home inspection.
Older homes may require updated wiring and plumbing. An old roof should be replaced. Address problems with heating and air-conditioning units.
2. Outdoor Replacement Projects
Replacement projects will give you more added value than remodeling projects, according to Remodeling Magazine. Fortunately for homeowners, these types of projects are also the least expensive and add to the home’s curb appeal. Consider replacing the garage door, siding, the front door and windows. The average return on investment for these projects is almost 72 percent.
The magazine suggests fiber-cement or foam-backed vinyl siding, adding a steel entry door, and vinyl window replacement.
3. Attic Bedroom
The number one home improvement project as far as recouping a return on your investment is the addition of an attic bedroom, according to Remodeling Magazine. At a nationwide average cost of a little over $50,000, expect to recoup 72.5 percent of the cost when you sell the home.
4. Add an Additional Bathroom
Over the past few decades, the kitchen was the average homebuyer’s focal point when choosing a home. In 2011 bathrooms became more important to buyers than kitchens. That said, an additional bathroom, even a half bathroom, adds significant value to your home, according to the experts at the National Association of Home Builders (NAHB).
A half bath may add up to 10.5 percent to a home’s value, while a full bath can tack on an additional 20 percent. Of course, the amount of additional value you will receive varies according to the home’s other features.
The price of adding another bathroom to the house varies as well, depending on region. If you live on the West Coast, plan on paying almost $50,000 for a new bathroom, according to Remodeling Magazine. The magazine also states that, at the sale of the home, you’ll recoup almost 67 percent of the cost of the addition. East Coasters can plan on spending a bit less – around $41,000, but will recoup less as well – 47.7 percent of the cost.
Tip: If you’re on a tight budget and can’t afford a bathroom addition, give the existing bathrooms a facelift. A fresh coat of paint, new fixtures and new flooring will add value and make the home show better.
5. Kitchen Improvements
Kitchens tend to be the heart of a family home so anything you do to improve your kitchen will add value. Again, painting the kitchen should be the first step, whether you plan an entire remodel of the room or just a minor facelift. Vinyl flooring tends to make the room look dated, so consider replacing it with laminate or tile. New cabinetry, kitchen sink fixtures and updated lighting will all add value.
Tip: Folks on a budget can still increase value by sanding and then painting or staining cabinetry and adding new hardware and by purchasing new (matching) appliances and new countertops.
6. Boost Curb Appeal
When a TV show can be built around this one subject, it’s a pretty good indication of its importance. Curb appeal is what beckons potential buyers into your home and underestimating its importance to the value of a home is a big mistake many homeowners make.
If you have a healthy budget, and your landscaping needs extensive work, consider hiring professionals for this home improvement project. A landscape architect can be pricey but necessary if your yard is in desperate need of an overhaul. According to Jeff Mitchell with the American Society of Landscape Architects (ASLA), curb appeal shouldn’t stop at the front yard, but should be extended to the backyard as well.
At the very least, clean the yard of any debris, trim trees and shrubs and spread fresh mulch in the planting beds. A poorly maintained front yard can result in up to a 10 percent drop in value, according to Houston appraiser Frank Lucco.
Tip: Budget home improvement landscape projects include:
- Line the walkway with solar-powered lights. The big home improvement stores carry a variety of inexpensive styles and all you need to do is stick them in the ground. Not only are they functional – lighting your way at night – but they provide ornamentation as well.
- Green up the lawn, keep it mowed and edged and reseed bare spots.
- Add color to the planting beds. Be careful to keep your color choices aligned with the home’s architecture. In other words, don’t add cottage garden-type flowers to a bed in front of a starkly modern home. Certain plants are grown because of their interesting and colorful foliage, such as hosta and coleus, and are better suited to more modern homes. If you have questions about what to plant, consult with the experts at your local nursery.
- Plant a tree. Yes, it sounds like an Arbor Day slogan, but planting a tree in your front yard pays off by helping cut energy costs in the summer (if strategically located to shade the house) and by adding value to the home. Not sure which tree to plant? Use the fun National Tree Benefit calculator to assist you with making the right choice. Just enter your zip code and the calculator will bring up a list of trees suited to your region and let you know the benefits of each.
7. Refurbish the Basement
Converting the basement to a family room, in-home theater or recreation area adds useable square footage to the home, which is one of the best ways to add value. Check out decorating magazines and websites for creative ideas.
8. Additional Storage
Most new homes come equipped with lots of storage. Older homes, on the other hand, tend to lack even some of the basic storage options, such as a coat or linen closet. If you lack the space to expand closets or other storage spaces or build new ones, consider redesigning the spaces you do have.
There are specialty stores now dedicated to nothing but storage solutions. Do-it-yourself projects may include adding a complete closet system or adding organization details to a pantry.
9. Additional Square Footage
Every 1,000 square feet added to a home raises the value by more than 3.3 percent, according to a 2003 study for the National Association of Realtors®.
While that percentage doesn’t sound significant, when you put it into numbers it makes a lot more sense. For instance, if your home is valued at $200,000, a 3.3 percent increase adds an additional $6,600 to the value.
Additionally, the 3.3 percent statistic can most likely be adjusted upward based on the age of the study. The study also claims that each additional bedroom adds 4 percent to the value of the home.
If your laundry is located in the basement, the value of your home decreases by two percent, so if you plan on adding square footage to the home, build a laundry room on one of the upper floors.
10. Miscellaneous Home Improvements
There are many small items you can add to the home that buyers will perceive as adding value. Some of these include:
- Alarm systems
- Water filtration system
- Luxury touches such as an upgraded dishwasher, whirlpool bathtub and built-in wine coolers may peak the buyer’s interest. Luxury homeowners can take this a step further by adding an in-home theater and additional spa-like features to the bathrooms.
One of the most important things to keep in mind when considering any home improvement project is to not go overboard. The value of your home is determined by the value of your neighbor’s homes, so don’t make improvements that bring your home’s value significantly over the general value of neighborhood homes. Over-improving is just like throwing money away.
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Great post with some great information, i read one of your posts about have house prices really increased, even with inflation and the general cost of living, these home improvement s will increase a sale regardless, especially when it comes to multiple bathrooms etc
Alex
This article is great – I know so many people who have had very little luck when selling their home, yet the ideas you’ve mentioned – such as creating additional storage or replacing the kitchen flooring with laminate are both really good ideas
in the process of refinancing, the recent appraisal is completely missing a 1/2 bath…I live in a coveted historic district on the east coast…what percentage more should I expect if lets say the appraisal came in at 300,000, when I have it appraised again?
Everybody Commenting: Of course, all things have to be considered to determine re: what to renovate, what makes sense based on cost, value added, etc… etc… My most important point to emphasis is this: Pricing homes, so that TOP DOLLAR is gotten, requires extreme market/brokerage experience, meaning real experience to evaluate with objectivity and clarity how buyers will view and perceive a property – regarding specifically: 1) a given neighborhood, 2) community, 3) school district, 4) on a specific street, 5) an architectural style, 6) size and certain limitations, 7) market objections, 8) market expectations, and 9) areas of extra appeal or pluses. ‘Guessing’ or ‘projecting’ within a $35,000 to 50,000 range is not hard with today’s internet resources, even for the inexperienced or untrained eye. However, a limited pricing effort not using a person with real market insight means there’s a high chance someone will net $7,500 to $20,000 less – AND NEVER EVEN KNOW IT!
Good suggestions!!keep up the good work we will say a prayer for you, how is the real estate dept.in va?
Some good ideas, but the most important bit of information reported is to not go overboard. Research home values in your area. don’t put $25,000 in upgrades on a home that’s only going to sell for $50,000. Be a smart shopper and repurpose what you can. Garage sales are a great way to pick up pieces that will make a difference. Always search the clearance isles at your home improvement stores. We took an outdated gold ceiling fan down, painted the metal brushed nickel and the blades black. Looks like a $200.00 new item for a bit of effort and about $10.00 in paint. new handles on cabinetry make a world of difference! Enjoy your projects and best of luck to all in getting the best bang for your buck!
I am in the process of deciding what to fix-up and get up to date in my condo and this article has a mass of information that is just as helpful to a condo owner as a house owner. I really liked what I was seeing here, it gave me some great ideas to look into for my home before I see it, Thanks!
$50K to convert an attic to additional space seems rather steep. I own a 1952 cap cod and none of the quotes I received was more the 5k and that included materials. Not sure if your talking about raising the roof to compensate for the room or not. But 50k would be better used to build out .. not up.
I run a specialist property buying company in the UK called Property Selling Expert and we see a number of older, samller properties which do not benefit from a downstairs toilet.
If you own such a property, creating a toilet under the stairs or adding a small extension to fit one in will pay dividends when it comes to selling your property and you should more than recoupe the investment required.
An excellent article for sure, but the question on many of these improvements is how much will it add to the resale value and is it necessary to selling the property. If you are spending 40k on a kitchen remodel and the value of the home is only raised by 10K it is likely not a good idea.
I’m sorry but as a 20+ year mortgage professional; who’s also dabbled in home improvement sales when I got bored I can tell you that Remodeling Magazine, to which this blog refers for appreciation advise, is an industry scam. It’s simply a tool used by the tool who is trying to sell you 10 windows for $13,321 (becasue they’re really good windows). In return for the magazine reporting incredible amounts of equity appreciation when homeowners do a major home improvement, Remodeling Magazine is good enough to accept advertising dollars from home improvement companies so they can use it to reinforce and strengthen their pitch. If I recall, Remodeling Magazine was the highlight of Step #4 in my windows pitch (Step #4 was “price conditioning”). This rag, in conjuction with financing chicanery, helped me successfully sell an average ten window house for $13,321 (I knew before walking in the door what my price would be. The “21″ at the end of the price was code for my sales manager that it was a finance deal). “This project will pay for itself…” In reality, a major home improvement project like this, that the magazine may show a return on investment upwards of 90% in some regions, improves value by little if anything at all. What affects value is non-functional, windows, siding, bathrooms, etc. The appraiser can deduct from the value or, worse yet, make the appraisal “subject to” repairs, which will delay your purchase or refinance.
windows count for a good portion of heat/cool loss. Upgrading windows and doors goes a long way towards increasing the houses efficiency. If you increase the efficiency then your average monthly bill to heat and cool way down.
Great tips, I love the inexpensive ones especially. Hardware tends to get overlooked but provides that little bit of extra for hardly any cost! The pool suggestion is a stretch to me, but I don’t deal with many million dollar homes – a price range where pools could be almost standard.
Great Article! Most of these seem pretty easy to do, and give me a good idea where to focus my efforts. I think my house will need new fixtures and going to give the floors a good steam clean.
This is some excellent advice I will take to heart. I never really thought about the master bedroom being one of the most important rooms to focus on. Thanks for the advice!
This posting about the top ten ways to improve your home before it goes on the market was fascinating. This really hit home when I sold my last house. We had a great real estate agent that brought up several of the ideas mentioned. I think the biggest bang for our buck was the suggestions to remodel our master bedroom and to repaint the whole interior. Not only did we get a great offer but I feel the house was not on the market as long as it could have been.
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