How To Increase Home Value: 11 Top Tips

Reasons To Improve Home Value

Increasing your home value takes work. It’s not a spectator sport. Given that, let’s start by going over a few reasons to do this that might provide a little extra motivation:

• You can sell your home for a higher price. If your home really is worth more based on the appraisal, you can sell it for a higher purchase price and be sure the value is going to appraise at or near the agreed upon amount. Selling the home is the way you would realize the profit from your investment in the property.
• You can increase your home equity faster. Equity in your home is a function of not only your loan payments, but also the value of the home itself. The bigger the difference between your existing mortgage balance and your home value, the more you can use your equity for home improvements, debt consolidation or whatever goal you might be looking to accomplish.
• You can potentially cancel private mortgage insurance on a conventional loan. If you make a down payment of less than 20% on a conventional loan, you have to make PMI payments until you reach 20% equity in the home. If you make substantial home improvements, you can request a new appraisal of your home and possibly have PMI payments removed early. The exact equity requirements needed on the reappraisal may depend on the investor in your mortgage, your number of units and how you occupy the home.

How To Add Value To Your Home

When it comes to adding value to your home, there are several things you should consider. We’ll start with a couple of basic things you can do to make sure your home looks as good as it can before we go into improvements that can be made to bring you back the highest possible level of return.

1. Declutter The Interior

It’s a little counterintuitive, but one way to increase your home’s value is to get rid of what you don’t need. Downsizing a home doesn’t necessarily mean that you have to live in a smaller house; sometimes it’s about decluttering to make your existing space feel bigger. Open concepts remain a popular trend among home buyers.

When the home buyers are walking through your home, you want to make sure they can navigate easily and visualize themselves in your space. Sometimes that’s about minimizing your footprint by removing furniture you don’t use and digitizing pictures. If you’re looking to move, this will be less to pack up anyway.

2. Clean The Outside

First impressions are everything, and when potential buyers come to look at your house, the first thing they’ll notice is the exterior. It never hurts to clean it up. Take care of that yardwork you’ve been putting off. Rent a pressure washer and remove those years of dirt and grime that have built up on your siding. Give your windows a scrub, inside and out.

3. Consider A New Paint Job

Depending on your taste in paint colors, you may want to make a change and go neutral when you’re looking to sell. Contrasting colors isn’t a bad thing, but if you have painted your house in a way that’s an homage to Jackson Pollock, you may choose to tone it down for the open house. Additionally, a fresh coat of paint in general can give a house new life.

From a practical perspective, you may need new paint if you have cracked or peeling areas in houses built before January 1, 1978. Because of the prevalence of lead paint being used prior to that time, not repainting or otherwise mitigating the issue may cause you to fail an appraisal for a potential health hazard. Being proactive upfront can stop delays later.

 

4. Increase The Home’s Energy Efficiency

A survey conducted at the end of 2023 by Rocket Mortgage^® showed a strong preference among home buyers looking to buy in the next 5 years for various energy efficiency features in their homes. These can include new windows, energy-efficient LEDs and insulation to save money on heating and cooling bills.

Among those polled, 35.7% stated they would like to see energy-efficient windows, while 35.6% prioritized an energy-efficient HVAC system. Solar panels were also sought after by 25.3% of respondents. Don’t just take us at our word. Studies show a premium of up to 8% on the sale price compared to homes that aren’t Energy Star-certified.

5. Add Some Square Footage

One of the biggest things you can do to increase the value of your home is to increase the square footage. This adds to the usable space in your home and can be really attractive. Some common things that people are always looking for extras of our bedrooms and bathrooms, but you could also expand the kitchen and family room spaces if you’re looking at home additions.

It’s important to note that if you’re looking to calculate square footage, rooms must have flooring, covered walls and ceiling and the option to live in it year-round if someone wanted, meaning having the ability to heat the space if necessary.

6. Improve Your Curb Appeal

We’ve talked about how initial impressions matter, so upgrading the curb appeal of your home can make a lot of sense. These don’t have to be big upgrades. Things like fixing cracks in a sidewalk or driveway can go a long way. Maybe you put flowers on the porch or put up a few birdfeeders. Painting your front door a contrasting color could make it pop in photos.

7. Install Smart Technology

From both a convenience and an energy-efficiency standpoint, smart home technology is all the rage. Our home buyer preference study from earlier also showed that 24.6% of buyers would like a smart thermostat, 17.5% of them would enjoy smart lighting and 15.5% of respondents wouldn’t mind a smart entertainment system.

In addition to the convenience factor of being able to control lights, thermostats and other appliances from your phone or with your voice, some of these devices can be tied together and use machine learning to adjust to your habits, which could lower your energy bills. There are also other appliances like smart ovens and smart refrigerators that can cook food to the right temperature or alert you before you run out of a family favorite.

8. Remodel The Kitchen And Bathroom

The kitchen and bathroom are two of the most functional spaces in any house, so having things that appeal to buyers or even your own personal use can be very important. Some of the most obvious upgrades may be appliances, tubs or more luxurious shower spaces. But not everything has to be a major expense.

In both rooms, storage space is important, so consider your cabinets, whether adding more or just replacing aging hardware. Next up might be sinks or countertops, along with backsplashes. If you’re looking to spend a little more money, tile or flooring will be a big-ticket item, but you may see the payback in your enjoyment or a sale.

9. Put In A Pool

If you live in a northern climate, having a pool at your home to access during the summer can certainly set you apart among your neighbors when it comes time to sell. In warmer areas where the mid-summer heat can be oppressive, it may be a must-have for some. Price can vary, depending on the pool surface material as well as whether it’s inground or aboveground.

In addition to the installation costs, there is long-term maintenance associated with treating the water periodically and having it covered or uncovered.

10. Add A Deck Or Patio

It’s easy to get hung up on interior living space, but the exterior can be just as valuable for entertaining when the weather permits. Having a deck or patio can give you extra room to hang out, play games and wine and dine guests. While a grill is common, you can also upgrade to a more full-featured outdoor kitchen space. A porch swing may be great for reading or catnaps.

11. Construct A Garage Or Shed

While it won’t add to square footage, garages or sheds can be considered prized by home buyers and you may find you get more enjoyment out of your space. Whether trying to keep your vehicles out of the elements or creating a workshop or fortress of solitude, having these can push up the value of your home.