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In hot housing markets, many homeowners are taking advantage of significant jumps in the value of their property. But while a rising tide can lift all ships, you can also be more proactive in increasing your home’s value at a faster than average rate, which helps if you want to sell your home or refinance your mortgage.
We’ll walk you through some of the best ways to increase the value of your home. But keep in mind that options should be filtered based on your budget, current market trends, and your local real estate market.
Why are you trying to increase the value of your home?
Before embarking on home improvement projects, use the following question to ask yourself about your motivation:
- Are you going to put your home on the market next and want to attract as many interested buyers as possible at the highest price?
- Is this a quick sale that only needs cosmetic renovations?
- Are you looking to refinance your mortgage to lower your interest rate and monthly payments?
- Or are you just trying to accumulate more equity in your home with no plans to sell anytime soon?
These are critical questions that need to be answered to determine how much you should spend upfront to increase the value of your home and whether it’s worth it in the long run.
Ways to increase the value of your home
When determining your budget, you should simultaneously make a list of home renovations. This will make it clear how much money you really need and whether you can afford to pay yourself or need financing. Here are some popular ways to help increase the value of your home.
New coat of paint
A fresh coat of paint can instantly refresh the look of your home and make it more attractive. Realtors recommend using warm neutral colors such as tan, tan or gray. Additionally, cool neutral colors can help small rooms appear larger. The average cost to paint a 400 square foot room is $1,000 for a professional job, although it can cost a lot less if you do it yourself.
The exterior of your home might also need updating, as it is constantly exposed to the elements throughout the year causing it to chip, crack or peel. A good pressure washing and a good paint job go a long way in making the house look like new.
Boost your curb appeal
Your home’s exterior is the first thing potential buyers will see, so investing in your curb appeal (beyond new paint) will increase your chances of catching a buyer’s eye and generating lots of business. interest which would turn into a more expensive sale.
Options include planting brightly colored flowers in your front yard (or hiring a professional landscaper), replacing the home’s front door, garage door, siding and windows. .
Keep in mind that these projects can easily grow from a few thousand dollars to tens of thousands, so it’s important to determine which project will give your home the most value for your dollars spent on improvements.
Related: 12 impactful home renovations under $5,000
Bathrooms are one of the most critical rooms in a home. If your bathroom is over 10 years old, a facelift is needed if you want to make your home more attractive to potential buyers or sell it for a higher price.
Upgrades like a fresh coat of paint; replace cabinets, faucets, showerheads and countertop; or installing a new sink or tiles can go a long way. Many of these ideas you can also do yourself for a few hundred dollars.
But if the bathroom needs a bigger renovation — or if you’d rather leave the plumbing to the professionals — a full renovation can cost an average of around $10,000.
Transform your kitchen
The kitchen is another room that ranks high in the hierarchy of buyers’ needs. An attractive kitchen will dramatically increase the value of your home.
You can remove unloaded load-bearing walls to give it a more open look, install a kitchen island, replace old appliances with new stainless steel models, update the backsplash, repaint or replace cabinets, or install wooden countertops. granite.
Before embarking on a kitchen remodeling project, talk to an interior design or real estate professional to understand what features will help your home sell or increase its value. They will also be able to tell you what types of kitchen trends customers currently prefer and are willing to pay more for. This way you can avoid wasting your money.
Make the house energy efficient
According to a study by Freddie Mac, energy-efficient upgrades can lead to higher home values.
Freddie’s findings show that fixtures such as energy-efficient appliances, light bulbs, windows and solar panels add value, which results in the home selling for higher prices. Value is derived from energy efficiency features, as well as energy savings that mean more disposable income for homeowners to meet their monthly mortgage payments.
“In other words, energy-efficient homes might have a higher collateral value and might place less financial stress on their owners,” Freddie says.
As always, be aware of the cost before going this route, as these options can quickly add up.
Expand your square footage
Adding square footage to your home is another way to increase your value, although consulting a professional will ensure you make the right addition and get the best return on your investment.
Here are the options to consider:
- Accessory housing: It could be an additional living space on your property, which has a bathroom, electricity, running water, a kitchenette and a sleeping area. For example, it could be a garage or a shed converted into guest accommodation, an extra room for a large family, an office or rental accommodation.
- Finished basement: Turning your basement into a finished living space for guests, such as a recreation room, gym or office, can dramatically increase the value and visual appeal to potential buyers.
- Finished attic: Just like the basement, turning your attic into living space can increase the value of your home.
- Add bedroom: The more bedrooms you have, the higher the price of the house. Depending on how much space you have to work in, add one or more additional rooms to match your local housing market preferences and trends.
- Add bathroom: The more bathrooms, the more attractive the property, especially for families. An extra bathroom or powder room is worth it, especially if you only have one bathroom.
As always, there are pros and cons to these options. Adding more square footage likely means you’ll need to spend more time maintaining and maintaining the property. Utility bills may also increase depending on expansion.
Let your budget guide you
Your reasons for increasing the value of your home should, in turn, inform your budget and how you decide to finance home improvements. A quick sale means you’ll spend very little time on major upgrades, maybe just updating a few devices and a paint job.
A standard home sale will cost more because you could make bigger improvements to attract a buyer while making repairs brought to your attention by your real estate agent, home inspector, or at the request of a serious buyer.
Take stock of your financial situation and avoid snacking on more than your income can comfortably support. Also consider a cash refinance or home equity loan given the current low interest rate environment. Also, the IRS allows certain deductions for these payments on either of these debts if the funds are used for home improvements.
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