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May 8, 2020

Home Improvements That Increase Value

According to Remodeling Magazine’s 2020 “Cost Vs. Value Report,” the top home improvement projects that will increase your value are both on the outside – adding stone veneer and replacing your garage door, which each recoup about 95% of their cost.

Sticking with the theme of the outside of your home and the impression it gives, curb appeal can be a major winner as a home improvement investment, says Jesse Harris, property manager at Medallion Capital Group, who points out that nobody wants to live in the neighborhood's “ugly house.” That includes making sure the siding is in good shape and you’ve spruced up the landscaping as well.

Other great ways to make that incredible first impression include painting your front door and creating an inviting, welcoming vibe on your front porch with furniture, flowerpots and a cheery doormat.

Increase Home Value Inside
Of course, curb appeal is just one of the important factors in increasing home value. Heading inside, look to the kitchen first, given that it’s where most people congregate at the heart of the home. But with a minor kitchen remodel running around $21,000 and escalating up to more than $125,000 for a major upscale kitchen remodel, you might want to settle for something more affordable.

Start with smaller items, such as kitchen appliances, which get a lot of bang for the buck, says Ashley Baskin, a licensed real estate agent who serves on the advisory board for Home Life Digest.

“If someone is shopping for a new home, old, outdated and mismatched appliances in the kitchen stand out like a sore thumb,” she says. “Even ifother upgrades have been made, old appliances can completely overshadow thework that was done and detract from the kitchen’s full potential.” While you’re shopping for replacements, consider an energy-efficient home improvement with Energy Star models, which will save money each month due to lower utility bills.

Next on Baskin’s list is the bathroom, where new fixtures can make a great impression. “Since you probably have to paint anyway, replace the fixtures with an updated matching set while you are at it,” she suggests. Not only is this a relatively cheap swap, but most people can even do-it-yourself. If you’re looking for energy-efficient home improvements there, install low-flow aerators or choose Water Sense models.

And while cosmetics upgrades are important, don’t overlook the “hidden” systems that make your house run, which are particularly important when it’s time to sell. Prioritize major systems like your HVAC, plumbing, foundation and roof. While they’re not nearly as exciting as a bathroom or kitchen remodel, they are key to a healthy home – for you and future buyers.

Here are some other home improvements from Remodeling’s 2019 Cost Vs. Value Report that will give you the best bang for your buck when it comes time to sell:

Garage doors: Replacing a garage door is a recurring winner on Remodeling’s list each year, returning almost 100% (97.5%) of the average $3,611 it costs.
Manufactured stone veneer: Adding stone veneer on the outside of your home is not only attractive but has a return of 95% on the average $8,907 spent.
Deck: Whether you choose a wood or composite deck, investing $13,000 – $19,200 in a new deck is a good bet, returning between 69% – 76% of the amount spent.

Windows: If it’s time to get rid of those old, drafty windows, doing so could reward you with a return on investment between 70% – 73.4%. New windows may cost you $16,000 – $21,000 (depending on whether you prefer wood or vinyl), but they’re well worth the investment on your resale value as well as your energy costs!

Siding: Vinyl siding is another great investment, returning 75.6% of the average $16,036 it costs.

Front Door: Entry doors complement your home’s curb appeal, and they’re the least expensive remodel on this list. A front door costs an average of $1,826 and you’ll recoup 75% of that.

Bathrooms: A bathroom remodel can be one of your most expensive endeavors at $20,000 – $65,000. However, it will return between 60% – 67% of your investment. This is a good return, but just be careful not to go overboard with high-end fixtures, flooring, etc. The more you spend on your products, the lower your return will be.

Kitchens: Similar to bathroom remodels, kitchens are one of the more expensive remodels and it’s easy to go crazy with expensive additions. A minor kitchen remodel that involves painting walls and cabinets, adding new fixtures and more will get you a return of 80.5% of the average $22,507 spent. A major remodel can cost upwards of $66,000 – $132,000 and has a lower return of roughly 60% – 62%.

Roof: A roof is one of the first things buyers ask about. No one wants to have to replace a roof because it’s so expensive. Depending on the size of the home, an asphalt roof may cost around $22,600 with a 68% return on investment while a metal roof averages $38,600 with a 61% return.
Master suite addition: Easily one of the more expensive updates on the list coming in at around $131,000 – $272,000, a master suite addition returns between 50% – 60% of what you spend. A lot of the older homes don’t have master suites, but for home buyers this is often a deal breaker. A master suite has become a must-have in today’s market.

Best Home Improvement Loans
Of course, many of these upgrades can come at a steep cost – even if they’ll eventually increase your home value. That’s why you might want to consider a personal loan in order to cover the costs. Personal loans have a number of benefits over using your credit cards or other options for home improvement financing, such as taking out a home equity loan or doing a cash-out refinance.

With a personal loan, you get a fixed interest rate and a defined repayment period with a set amount to pay each month. As an installment loan, you can only spend up to the amount of the loan, compared to revolving credit where you can keep spending even while you’re paying it off.

How To Add Value To Your Home On A Budget
Even if you do take out a personal loan to cover your home improvements, you’ll want to make sure you can make it stretch as far as possible. Most experts agree that painting is one of the top things you can do to increase your home value – a fresh coat of paint can make a room pop and also make it look refreshed and clean.

“The number one easy fix that is a must before the home goes on the market is a fresh coat of paint throughout the house,” says Baskin, who recommends neutral tones and avoiding wallpaper. “Even better is if the paint job is kicked up a notch with new trim, baseboards or even crown molding,” she says.

Remember to do your projects in bite-size pieces. While you don’t have to do it all right away, consider the remodels that will increase the value of your home above all else. Don’t incur massive amounts of debt or deplete your cash reserves attempting to finish everything at once. Also, watch your spending on luxury renovations and materials since it may not translate into more money when you sell. You don’t want to spend a lot of money on making the update personalized to your taste. Doing so could cost you as you may upgrade beyond the value of your neighborhood.

What Adds Value To A Home?
Sometimes, it’s the little things like the upkeep that we tend to overlook. If you’re getting ready to sell your house, make sure to look at it as a prospective buyer would and take care of all the “little” issues, which in a buyer’s mind, might equate to big issues down the line. Some things to keep in mind include:

De cluttering cupboards, counters and shelves
Cleaning everything so it shines
Making sure all the lights work
Staging rooms like the bathroom with fresh towels and the living room with bright pillows
Replacing drapes and worn rugs
How To Increase Home Value
Finally, think about the upgrades that will make you and your family happy while you live there, such as a deck or a patio that allows you to take advantage of the trend toward “outdoor living” and gives you more ways to enjoy your home. For pure return on investment, prioritize the deck, according to the Cost Vs. Value report, which returns an average of about 75% of its cost, compared to a patio that only recoups about 55%. If you’re considering a home project to avoid, a sun room is one of the most expensive home upgrades, given that you have to extend your foundation.

And, if there’s a project you’ve been wanting to undertake to improve the livability of your home right now, consider just going for it if you have the money or qualify for a personal loan. Yes, boosting home value is important, but so is being happy in the home you have now.