If you are planning to sell you home in the future, you’re probably wondering what steps you can take to help your home sell quickly and boost the selling price. The question you need to answer is “How much does this improvement I’m considering add to the value of my home?”
Before you start spending a significant amount of money on home improvement projects, you need to keep a few things in mind. The return on your investment depends on the:
- Value of your house
- Market price of houses in your neighborhood
- Status of housing market where you live
- Quality of the home improvement project itself
Realize that not all home improvement projects can positively impact your bottom line. Some projects can increase your home’s value while others can make selling it more challenging. For instance, replacing old elements like doors, windows and siding generally produce a better return on investment that bigger remodeling project.
Here’s a short list of home improvement projects that are known to produce the highest resale value.
Outdoor Improvements: It is all about first impressions. Investing money to spruce up the curb appeal of your home can go a long way. Nicely landscaped lawns to replacing siding are easy ways to add value and impart the concept of being low maintenance to cost-conscience buyers. (link back to curb appeal blog)
Roofs and Windows: While these can be expensive to replace, prospective buyers expect them to be in good condition. An updated back porch won’t hold much value if a buyer who knows the roof needs to be replaced. The catch is that replacing the roof and windows won’t add much to the bottom line but not doing it can certainly detract from it.
Kitchen Remodels: People like to see modern conveniences instead of a dated kitchen. The trick here is to make sure you balance the cost you invest to the value it will bring. Make sure you’re doing the “right” kitchen remodel and spend no more than 25 percent of the homes value. A minor remodel that updates cabinet doors and appliances can go a long way. While a complete rebuild that tear down walls, add a center aisle and granite countertops might not provide the financial return you’re seeking.
Bathroom Remodels: Just like remodeling a kitchen, you need to do a cost analysis to ensure you get the return on investment you’re seeking before you start making changes. The rule of thumb is to spend between 12-15 percent of the value of your home when updating a bathroom.
There are other projects, such as luxury upgrades and garage conversions that might have a negative impact on your resale value. Never assume that buyers will pay for things like marble floors.
No matter what you do, make sure that your home improvements fit in with your neighborhood. You don’t want to add a second story when all the homes in your neighborhood are on the ground floor.
Finally, make sure your upgrades in one area balance with the rest of your house. The last thing you want to do is make your kitchen amazing while the rest of your house looks 25 years old.