Home Improvements That Add Value

 

Putting money into home improvements you want is not the same as investing in changes that will increase the value of your home. Recouping costs on improvements depends on broad factors like:

 

         the current condition of the housing market,

                 the region in which the home is located,

         the value of homes in the surrounding neighborhood,

         and the timing of the proposed sale.

 

As a comparison, according to a survey by Remodeling magazine in 2008, adding a mid-range deck to a home in Columbus , Ohio would return about 57% of the value of the work at sale, whereas the same deck in San Francisco would bring back 131%. Wait a a year or two, however, and that situation could reverse itself. There are, however, some guaranteed "winners" in home improvement projects.

 

Sometimes Mundane Changes Are Better

 

Valuable changes do not necessarily have to be dramatic. Some of the highest value alterations are easily accomplished including:

 

         Clean and de-clutter, staging key rooms to enhance the property upon showing.

         Repaint with neutral colors. Never trust that buyers will be able to imagine what the home will look like "if."

         Replace soiled carpet. (While not inexpensive, hardwood flooring and popular kitchen and bathroom materials like travertine are high-value choices.)

         Update lighting fixtures to achieve a modern look and to keep the rooms bright.

         Landscape and maintain the yard.

 

The rule of thumb is never try to sell someone your dirt. If you can do nothing else, put a spotless home on the market. If, however, you do have a budget for improvements, consider the following:

 

Updating the Kitchen

 

Real estate experts agree across the board that homeowners who cannot afford to update any other part of the home should concentrate on the kitchen. Buyers like clean, fresh-appearing kitchens. At minimum, paint or put up fresh wallpaper and update the flooring. If new cabinets are impossible, refinish the existing units and install new hardware. Classic designs and high-quality materials are a must.

 

Convert Existing Space to Something Useful

 

Take dead space and make it livable, like creating an attic bedroom or a basement family or media room. In general these kinds of improvement projects return about 75% of the initial investment. An added bathroom will bring back about 66%, while a deck, depending on the geographic region, recoups an average 85%.

 

Green is Good

 

Anything that increases the energy efficiency of the home is a high-value project. Insulated, double pane windows generally recover 81% of the costs of installation. Whenever anything is done that falls into this category, keep documentation on the change and, if equipment is involved, how it functions. Also, keeping a record of utility bills that shows a calculable monetary savings over a period of six months to a year is a definite plus.

Reducing your home's energy consumption will help you save money monthly,
as your energy efficient home keeps your lighting, heating and cooling
bills low. This will help you save money which you can use for your
existing mortgage loan and monthly repayments.

Be Careful Not to Incorporate Negatives

 

There are, however, so-called "improvements" that can work against home value and raise insurance premiums. A prime example is a swimming pool, which adds nothing to the resale value of a home due to the expense of maintenance and the increased liability incurred from potential pool accidents, especially if children will be present in the home. In some cases, the best pool-related improvement is to spend the money to fill it in.

 

With any change to the home, review the terms of the homeowners insurance policy, especially if square footage is added to the residence. Do not, however, necessarily assume that premiums will rise as a result. In some cases, like the addition of an energy efficient heating and cooling system, the insurer will likely offer a discount. Full disclosure is the best option to guarantee comprehensive coverage and to be able to present an accurate assessment of the cost of comparing insurance quotes to a potential buyer.