How To Increase Your Home's Value
When it’s time to sell, every homeowner wants to get the most out of their home. Buyers like to see renovations, updated decor and new gadgets during viewings, but which improvements are worth the cost? This guide distills everything you need to know into a few simple steps.
Step 1: Determine Your Goals For Increasing Home Value
Your goals for increasing your home value depend on when you plan to list your property. If you’re looking to sell as soon as possible, you’ll probably need to do quick, less-expensive home improvement projects. If you don’t plan to sell for another 10 years, you may have time to do a major overhaul.
Step 2: Figure Out Your Budget
Once you’ve decided whether large-scale or small-scale projects are right for you, it’s time to lay out a budget. Home décor experts say that you can expect to spend around $100 to $200 per square foot on complete renovations. Determine how much you want to spend on your home improvements before beginning.
If you choose to do a major renovation, a personal loan can help you finance your project. Personal loans are loans that you pay back in monthly installments with interest. They usually have much better interest rates than credit cards.
You might also consider a cash-out refinance. Cash-out refinances take a portion of equity, which is the amount of your home’s value you own, and replace your mortgage with a larger one to cover the difference.
For example, let’s say you bought your house for $200,000 and you’ve paid off $50,000, but you want to make $20,000 worth of renovations.
With a cash-out refinance, you would take $20,000 of your $50,000 equity, then add that amount to your new mortgage principal. Since you owed $150,000 before the renovations, your new mortgage would be worth $170,000. Your lender would give you the $20,000 in the form of a check a few days after closing.
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Step 3: Select Your Project
Once your budget’s ready and you know how much time you want to commit, it’s time to choose your project. We’ve created a list of some high-return home improvement projects you might want to consider.
Upgrade Your Paint
Looking for a low-cost way to modernize, upgrade and increase the appeal of your home? Look no further than a paint job. Paint is a major draw for buyers, so peeling or outdated paint can be a turn off. Take a walk through your home and decide which rooms need a fresh coat of paint.
If you only have a few hundred dollars in your budget, focus on the kitchen and bathrooms. Buyers usually consider these rooms to be two of the most important areas of the home.
You’ll want to consider choosing neutral paint colors. If a room has an overly distinctive paint choice, like an electric orange or neon pink, that color may be less likely to appeal to a buyer’s personal preferences. You can add instant appeal by painting a room gray or tan.
Painting by yourself could take a few days, but if you have the time, expect to spend around $25 a gallon. Otherwise, hire an expert to handle multiple rooms for around $1,000. Expect a return of 1% to 2% for your efforts.
Touch Up Your Landscaping
The exterior of your home is the first thing buyers see, so it’s worth the cost and effort to spruce up your curb appeal. Mow the lawn, trim the shrubbery, rake the leaves and touch up the paint on your fence. You should also plant a few brightly colored flowers. Low-maintenance flower beds can help your yard look great and catch a buyer’s eye from the road.
Doing your own landscaping can be a time-consuming but more affordable way to improve your home’s value. Expect to spend between $100 and $200 on tools, fertilizer and outdoor decorations. You might spend one or two weeks cleaning up your exterior, particularly if your lawn is in bad shape. Depending on the extent of your landscaping, you may see an increase of 1% to 3% in value.
Modernize Your Bathroom
Buyers consistently rate bathrooms as some of the most important rooms in the home. Luckily, bathrooms are also the most cost-effective to upgrade. Remove dated wallpaper and replace it with a modern, neutral coat of paint. You can quickly swap out the hardware on drawers and closets and have a new look by sundown. Replace dated light fixtures and fluorescent lighting and install LED bulbs.
You don’t need to budget for a full remodel to modernize your bathroom. You can expect to bring in big returns with as little as $400 invested. If you’re doing your bathroom upgrades yourself, plan for at least a few days of work.
Keep It In The Kitchen
If you want to focus on repairs in one room, you can’t go wrong with the kitchen. A modern, updated kitchen ranks number one on millennial home buyers' priority lists.
If you plan to stay in your home for at least a few more years, you’ll have time for some significant kitchen improvements. According to Consumer Reports, spending as little as $5,000 on your kitchen can bring up to 7% back in returns when you sell.
Here are a few things you can do to improve your kitchen for buyers:
- Replace old and broken appliances with new models.
- Apply a fresh, neutral coat of paint to the walls.
- Take a look at your cabinets and consider their condition. Though replacing your cabinets might be too expensive, re-painting them and replacing the hardware can be effective.
- Thoroughly clean your kitchen from top to bottom.
- Choose your materials carefully, because quality counts. Granite countertops may cost a bit more than Formica, but buyers will notice.
Unlike other home improvement projects, you might not want to remodel your kitchen yourself. Research home improvement companies and plan to spend about $5,000 on a basic remodel. If you replace countertops or cabinets, you’ll spend more. Depending on which renovations you choose to do, they may take anywhere from a week to a month to complete.
Most people think of their utility bills as something they can’t change. However, new advancements in energy-efficient home additions can lower costs and be a big draw for buyers.
One of the best ways to decrease your home’s environmental impact is with energy-efficient windows. Energy Star certified windows can lower your home’s energy costs by up to 15%. Replacing all the windows in your home can average between $8,000 and $24,000, so unless you plan to live in the home for another decade, choose only a few key windows.
Need a low-cost way to cut your utility bills? Switch to LED bulbs throughout your home. LED bulbs cast better light than fluorescent bulbs and use much less energy. Plus, they’re available for as little as $7 each and some models can last up to 23 years.
Don’t forget to keep up with your home’s HVAC, plumbing and electrical system maintenance to ensure that your home isn’t wasting energy.
Energy improvements can cost anywhere from $100 to $30,000 depending on how green you decide to go. Your improvements can also take as little as an afternoon or require months of work.
Step 4: Make A Plan
After you choose how you want to upgrade your home, create a plan of attack. First, decide if you need to hire a contractor to get the job done, go the DIY route or do a combination of both. This decision will depend on your skill level and the size of the job. You may be able to handle painting a room or two by yourself, but only seasoned professionals should attempt to replace kitchen countertops.
If you need to hire a contractor, ask around for recommendations. If you have a real estate agent, they may be able to recommend professionals as well. Don’t be afraid to shop around for contractors in your area and collect a few estimates before making your decision. Ask potential contractors for samples of their previous work and request references.
Set a schedule and deadline for your home improvements. Block out hours or days from your calendar and devote them to your projects. This will help keep you on task and on schedule before you list.
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There are plenty of ways to improve the value of your home, but you need to set a plan and budget before you take on a project. Decide how much you want to spend and base your project investment on how long you plan to stay in your home. If you want a major return on your money over time, you might consider renovating your kitchen or installing energy-efficient windows.
No matter what you decide to do, create a safe and scheduled plan before starting your improvements. Choose how you’ll finance your project – personal loans and cash-out refinances are two options. Rocket Mortgage® by Quicken Loans® can help you determine which loan option works for you.
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