Key takeaways...
- While your home’s value is determined by many factors, some home improvements could help increase its worth.
- There are multiple ways to pay for upgrades, including cash-out refinancing, a home equity loan or home improvement loan.
- If you plan to sell your home, it’s important to determine not just how much improvements will cost, but how much of that cost you'll recoup.
8 ways to increase the value of your home
The value of your home can increase or decrease due to any number of factors, including variables out of your control like conditions in your local housing market. Still, you can try to up your home’s value with strategic upgrades. Here are some ideas:
1. Clean and declutter
To help boost the value of your home, begin by decreasing the amount of stuff that’s inside it. Cleaning and decluttering are relatively inexpensive tasks, even in bigger homes. Professionally cleaning a four-bedroom home averages between $200 and $225, according to HomeAdvisor.
Of course, you could save money by doing the work yourself. Start by going through cabinets and closets and making donation piles. Then clean out drawers and other storage areas, making sure you’re not keeping anything you don’t need or want.
2. Add usable square footage
Homes are valued and priced by the livable square feet they contain, and the more livable square feet, the better, says Gordon Green, Team Leader of The Green Team with eXp Realty, Gordon is a Realtor and real estate investor based in Batavia, a suburb of Cincinnati, OH. Adding a bathroom, a great room or another needed space to a home can increase function and add value. A separate in-law suite can also be a smart idea.“Most homes do not have this feature,” says Green, “so adding one sets you apart from the competition when it is time to sell.”The cost of an addition varies, but typically ranges from about $22,200 to $81,800, with an average cost of $50,305.
3. Make your home more energy-efficient
Projects that lower utility bills can increase the value of your home. Installing a smart thermostat, for example, helps improve efficiency and save money, says Scott Ewald, director, Brand and Content marketing at Trane, an HVAC company.
“The right smart thermostat will allow a homeowner to control their home’s climate from anywhere, giving them the power to manage energy costs regardless of whether they are sitting on the couch or away on vacation,” says Ewald. “Such investments in home tech — particularly when connected to the HVAC, which is the largest mechanical system in the home — provides a strong selling point and highlights the home’s overall comfort, functionality, energy efficiency and convenience.”
It can cost between $175 to $1,000 to make this quick upgrade, according to HomeAdvisor, or an average of about $350.
Other ways to improve your home’s efficiency and value include replacing old, leaky windows, installing energy-efficient home appliances and adding insulation to your home.
4. Spruce it up with fresh paint
A fresh coat of paint can make even dated exteriors and interiors look fresh and new.
Begin by repainting any rooms with an “odd” color scheme, says Timothy Wiedman, a former professor and personal finance expert who has flipped homes over his career. For example, did you let your then-11-year-old daughter paint her bedroom hot pink 16 years ago? If so, that’s a good place to start.
The cost of an interior painting project ranges between roughly $970 and $3,000, with a national average of $1,988, according to HomeAdvisor. Your exact painting budget will depend on room size. HomeAdvisor pegs painting a bathroom — usually the smallest room in the house — somewhere between $150 and $300, while a 330-square-foot living room might cost as much as $2,000.
An exterior paint job, on the other hand, will cost much more, with prices ranging from $1,810 to $4,505 (the national average is just over $3,000).
If you just want to repaint a door or a single room, doing it yourself could cost you between $200 and $300. For bigger jobs, though — especially exterior ones — hiring a painter might be worth it, given that professionals can buy paint at wholesale prices, know what sort of finishes to use and are more adept at scaling ladders.
5. Work on your curb appeal
From power washing your driveway to mowing the lawn, improving curb appeal can make a big difference in your home’s value.
Upgrading your landscape can go an especially long way, says Joe Raboine, vice president of Design at Oldcastle APG, a manufacturer of exterior building products. Some ideas: a fresh walkway, shrubs, planters, mulching or even a new patio or outdoor kitchen.
6. Upgrade your exterior doors
Also in the vein of curb appeal, replacing an old front door can work wonders, says Wiedman. In the late ’90s, he and his wife replaced an old, ugly door with a solid mahogany door with a frosted, oval piece of lead glass. He stained the door himself to save money, and the result was “simply stunning.”
Don’t forget the garage doors, too, says Randy Oliver, president of Hollywood-Crawford Door Company. At a 102 percent return on investment, you’ll get back more than you spend, according to Remodeling.
“The front of the home is the first thing you, your neighbors and prospective buyers will see,” says Oliver. “Garage doors often take up the most amount of space on the front of your home, so installing a modern glass panel door or a rustic wood door will dramatically improve your home’s appearance.”
7. Give your kitchen an updated look
Many buyers zero in on the kitchen as the central feature of a home, so if yours is outdated, it can ultimately affect how much you garner from a sale. Likewise, if you aren’t able to utilize your kitchen fully due to layout, space or other concerns, you won’t be maximizing the space.
This project, though, will require a lot of money, and you likely won’t get every dollar you invest back. The average complete kitchen renovation costs around $80,000, and a homeowner would likely get around $60,000 of value when it’s time to sell, according to the National Association of Realtors. Midrange or modest upgrades actually offer a better ROI than the most elaborate ones.
If updating your entire kitchen is too big of an undertaking, a minor remodel could still have an impact on your home’s value — think coordinating appliances and installing modern hardware on your cabinets. Talk with a real estate agent about what makes the most sense and what will command the most dollars from prospective buyers.
8. Stage your home
If you’re planning to list your home for sale, consider skipping cosmetic home improvements and go with a home staging service instead.
Staging costs about $1,800 on average, according to HomeAdvisor, but the cost varies based on your needs and home. Staging services range widely, from decluttering and depersonalization (for example, removing family photos or specific decor) to bringing in rented furnishings and repainting. Simply put, the more work involved to stage it, the more expensive the production will be. A real estate agent can help you determine which staging services would make the most impact on your home’s value.
But WHY should you increase your home value...? (That means more property taxes, right?)
Your home is likely one of your largest assets, so increasing its value contributes to your overall net worth. Raising your home’s value has other benefits, as well, such as:
- Aesthetics and function: From reclaiming storage space for a bedroom to installing more modern tile in the bathroom, cosmetic upgrades can not only up the enjoyment and use factors, but also add value to your home.
- More profit when you sell: Whenever you decide to sell, a higher home value could translate to bigger upside.
- More tappable home equity: If you need cash, you can leverage your home’s equity — more so the more your home is worth.
- Some protection from market swings: If your home has a higher value, you might be able to guard against major dips in the housing market.
- Eliminate that pesky mortgage insurance: If you’re paying mortgage insurance premiums, having your home reappraised at a higher value could eliminate that cost.
- Property Taxes: Note Some additions and large renovations which require permits may trigger a higher property value with the County Auditor.
- Ready To Sell: The #1 Reason to increase your property value beyond enjoyment and liveability is you're thinking of selling for TOP DOLLAR within the next 3-6-12 Months.
Here are some interesting Home improvement statistics
- The top three projects on homeowners’ minds in 2024: routine maintenance, interior painting and installing new appliances, according to Angi.
- Homeowners spent an average of $13,667 on home improvements in 2023, according to Angi.
- Twenty-five percent of Americans have delayed home improvements and renovations due to the current state of the economy, according to a recent Bankrate survey.
Ok now I'm ready, but how do I pay for these costly home improvements?
- Personal loan
Personal loans allow you to borrow a fixed amount at a fixed interest rate. These loans are unsecured, meaning you don’t have to put your home or other property up as collateral. Many personal loan lenders allow you to borrow as much as $35,000 for home improvements — sometimes more, depending on your credit and other factors.
- Home equity loan or HELOC
Home equity loans are similar to personal loans in that you receive a lump sum of cash at a fixed interest rate and fixed monthly payment. Home equity lines of credit, or HELOCs, work like credit cards and come with variable rates.These borrowing options require you to put your home up as collateral to qualify. No matter which option you go with, the interest might be deductible if you use the money to make eligible home improvements.
- 0% APR credit card
If you need to borrow a small amount of cash for your home improvement plans, you might be able to skip the loan and go with a 0% APR credit card instead. Many cards have no interest payments on balances for up to 18 months, which can be ideal if you have a smaller-scale project in mind. A credit card can also work well if you’re able to pay your contractor with it. **Just remember: If you don’t pay your balance off by the time your zero-percent APR offer ends, your card’s interest rate will reset to a higher variable rate, costing you more.
- Cash-out refinance
If you have substantial equity in your home and want to do a major renovation, a cash-out refinance could provide you with the funds you need, albeit with a new loan at a potentially higher rate. The refinancing process is just as paperwork-heavy as taking out a mortgage, too, and you’ll need to pay closing costs.
Here are my Takeaways..
Investing into your home can often bring you joy, stress, anxiety and relief. Managing budgets, dust and contractors can be quite overwhelming. So, the end result must be worth the work, right? Yes! However, you must focus on two main aspects - Firstly your renovation must bring value to your property greater than the cost. Upgrading kitchens, baths, finishing unused basement space, upgrading flooring and paint are all great investments as buyers are looking for these things. Secondly, make sure to follow the design aesthetic of your home, adding a modern kitchen with designer finishes may not be the best idea if your home is a farmhouse or historical home. Try to match designs throughout the home so each room flows into the next. Avoid high cost items that do not bring value in the eyes of a Mortgage Appraiser such as pools, outdoor spas, and Solar panels. These items can and will cost you $$ when it comes time to sell.
Thinking of Selling your home and need guidance? The Green Team is here to Help!