Home improvement projects are not created equal. Some can have much more impact — and much higher return on investment (ROI) — on your home's value than others. Then there's the nightmare scenario: "improvements" that actually lower your valuation. We dig into those for you here. On the flip side, here are five projects with some real bang for your buck.
1. Preventive Home Maintenance
This is technically a collection of home improvement projects, but really deserves its own section. Taking care of the small (and big) things that need attention around the house must be one of homeowners' least favorite things. You're busy and already have enough to do without getting someone to come check out that weird sound coming from the water heater. Guess what? Prospective home owners feel the same way according to Inman. They want a new house in great condition that won't require much maintenance. As such, existing infrastructure issues often cause the biggest hit to a home's value (up to tens of thousands of dollars depending on the severity of known problems). Before you focus on aesthetic projects, make sure your plumbing, foundation, electrical systems, etc are in tip top shape.
Pro tip: It's important to have a professional check your foundation at least once a year. It's one of the most expensive parts of a home to repair and not something homeowners see frequently. As such, foundation problems can linger unacknowledged for years, becoming increasingly pricier to address. It's one of the things our House Managers check during Home Health Checkups.
2. Mid-range Kitchen Remodel
According to Moving.com, the kitchen is one of the first places that prospective buyers look at to determine whether a house commands its asking price. Many want an upgraded kitchen and do not wish to spend a lot of time or money building it after buying a new house. A minor kitchen remodel will generally recoup somewhere around 81 percent of its cost. Beware of going too far, however. A major kitchen remodel will only recover approximately 35 percent of funds invested. To maximize return on investment, focus on updating cabinets and countertops (even a fresh coat of paint can go a long way), installing stainless steel appliances, getting a new sink and faucet, and modernizing your flooring (hardwood and tile are popular with buyers).
Pro tip: Installing granite countertops is one of the highest returning investments you can make. If you're unsure what to do in your kitchen and there are no glaring issues, consider adding these.
3. Adding a Bathroom
There is some controversy around this suggestion. Some realtors (Fortune Builders, for example) claim that adding a bathroom will increase your home's valuation while others (including Bankrate) find it's nothing but a time and money drain. The key lies in your home's current state as well as your neighborhood. Do you already have two bathrooms in your three-bedroom house? If so, you may not get much value (or as much money back) from adding another bathroom. On the other hand, if all of your neighbors have the same number of rooms but more bathrooms, it's a project worth considering as your home's valuation is largely based on "comparable homes." If you're unable to commit to adding a full bathroom, adding even a half bathroom can really help as prospective buyers specify the number of rooms and bathrooms they're looking for when reviewing listings.
4. Pampering Your Curb Appeal
Curb appeal plays an important role in the amount of money buyers are willing to pay for a home. What sort of first impression are you making? Is the paint on the front door peeling? The house numbers old and worn? The mailbox falling apart and the front yard overgrown with weeds? Fortunately, these are some of the most affordable fixes to enact. Planting flowers or adding planters is a quick and easy way to make your home look more inviting. You can also consider adding solar lights to light your walkway.
Pro tip: Better Homes & Gardens has some great ideas at every end of the price spectrum for spiffing up your curb appeal.
5. Adding a Bedroom
While this last recommendation is on the pricey side, it arguably has the biggest impact on home value. According to Fortune Builders, bedroom (and bathroom) count is more critical than total square footage. "A smaller home with an extra bedroom will probably have more value than a larger home without the bedroom. There can be a huge difference between two, three and four bedroom homes in your market." It's not a quick or affordable project, but if you have an extra $115,000+ lying around, you will likely see a great return on investment from adding a bedroom or turning one large room into two smaller ones even.
These are just a few of the myriad steps you can take to build up your house's valuation. Don't know where to start? Our Ultimate Guide to Maximizing Home Value© breaks down how to choose and prioritize the projects that will have the most impact on your home's value — and discern which will provide the best ROI. Get the guide today!