Before you plunk down the card at Home Depot or call the contractor, you need to ask yourself “Who am I improving this for?” Dependent on your answer, you should seriously consider whether or not this project is right for you. The bottom line is that you should go into any home improvement project with the mindset that you’re doing this for your own enjoyment, and not as a way to make money.
Often, people dump a lot of money into a major renovation, then price their home to recover all of the costs, only to find their home sits on the market for months without any buyers. It is reasonable to expect that improvements do increase the value of your home, but make sure you’re realistic with your expectations.
If you’re preparing your house for sale, what are the home improvements that will actually bring higher value and buyers to the table?
Here are a few ideas:
1. Update the Kitchen
Most buyers consider the kitchen to be the heart of the home. A kitchen dates a home faster than any other room, because kitchens follow trends. For a full upgrade, you can expect a 70-80% return on your investment.
But if you’re selling your home soon and can’t afford a full renovation, any of these quick alternatives to a complete makeover are likely to pay for themselves:
- Updated appliances
- New countertops
- Under cabinet lighting
- Refinished cabinetry
- Ceramic tile backsplash
- Updated light fixture
2. Create New Space
Improvements that increase the functional space of a home hold their value longer than ones that just make a house look better. An investment in a finished basement will normally gain you 75% of the cost in actual value. Converting an attic into a bedroom can return upwards of 75% of its cost.
3. Renovate a Bathroom
Transform an ugly duckling into a swan of a master bath by updating your tile, tub, or shower or try finding more space. Stealing space can be a better solution if you can find the extra square footage. Open up a closet to make more room, create separate his-and-her areas with separate sinks, or add a skylight to bring in valuable natural light. Don’t forget those fixtures. Renovations to a bathroom usually return 75% of the value in an appraisal. At the very least, be sure to freshen caulk, towel hangers, paint, and fixtures.
4. Install a New Deck
Installing a deck may be the most cost-efficient way to add square footage to your house, and of all the outdoor home improvements except painting, it may be the most reliable value. Deck additions generally recoup 85% of their value. Put some new outdoor furniture on the deck to show how large it is. Empty rooms or deck space feel smaller than having them neatly furnished.
5. Manicure the Garden and Lawn
Make your yard look young! Pull out overgrown bushes or hedges and replace them with smaller neatly trimmed greenery that makes the house look newer. Be sure the mulch is fresh and sidewalks trimmed. Blooming plants are almost a requirement for a spring sale, and posted mums help brighten the outside in the fall.
Fancy gardens which will require time and money to tend usually won’t add to the offering price. Landscaping is for your own enjoyment. It may be a $10,000 investment, but it won’t add $10,000 to the value of your house. The same goes for expensive fences and stone walls. They look nice, but buyers don’t pay up for them.
6. Try Basic Improvements
A fresh coat of paint, new blinds, and better carpet may bump up the appraisal, but these medium priced improvements can keep the buyer’s eye focused on the great things about your home and not nuisance issues, like worn-out blinds or a shockingly pink bathroom.
Be cautious that you are not improving your home out of the market. If you already have one of the higher appraised homes in the neighborhood, comps may not be able to support a lot more value with your improvements. In a slower market, improvements may help attract that scarce buyer, but may not raise the amount they offer. If major improvements are on your plan, do them in time for you to enjoy them and not just stress about getting that money back.