5 Ways to Improve the Value of your Home
When determining what improvements you should invest into your home, there are many factors that will shape your decision. Adding a child may lead to a need to create more space. Your lifestyle will dictate your interests such as wanting outdoor living or entertaining space. The age of your home is also a key factor. Older homes have designs that are less open and typically have less closet and storage space. Older homes were also built when energy efficiency was not a factor. If you have old, wooden, single pane windows, they lower your home's value.
The decision is not just about adding value to your home, but about being able to sell your home quickly when you put it on the market. But above all, especially in this economic age, return on investment is typically the most important factor in making your decision.
When determining the value of your home improvement, determine the return on your investment by first calculating the cost of your home per square foot. If you are adding an addition, the improved value will be determined by the amount of space added. A ballpark value for adding outdoor decks or screened porches can add 50% of that value. Finishing a basement or bonus room would add somewhere around 75% of that value because there is already a small value given to that space. Upgrading your home with more light and upgraded fixtures or materials like adding hardwood floors is harder to factor. What you are trying to do is increase the cost per square foot of your home and to factor that value a comparison to other homes with those upgrades is most accurate but harder to factor out other variables.
The bottom line is do your homework. Shop around and if you are up to the task, do the work yourself to get the biggest bang for your buck.
So here is my list based on our 8 years of experience helping you add value to your home:
5. more space and light
In real estate, dark and cramped are no good, so a little light goes a long way. If your house has small rooms that block the flow of natural light, you may want to consider knocking down some walls and opening up your floor plan. Open floor plans usually involve combining your kitchen, dining and living areas into one big space that suits a casual lifestyle. If you're not up for taking down walls, even widening doorways 6 to 12 inches will make a noticeable difference. Vaulted ceilings will make it feel like there's even more space and a skylight adds natural light. Homeowners who turn their dusty old attic or an unfinished basement into a functional bedroom recoup on average about 83 percent of the project's cost when they sell the home. When it comes to adding new livable space to your home, building an attic bedroom or finishing out a bonus room is often easier on your budget than the alternatives. When you finish off unfinished space in your home, you don't have the cost of a foundation, framing and exterior finishing.
4. Curb Appeal
If your house doesn't look appealing from the outside, chances are a potential buyer will never make it inside. According to Bankrate.com, a good first impression can add five to 10 percent to the value of your home. Shutters add charm and depth. Paving a driveway or walkway that is in disrepair is a must, because this is what leads people to your home -- you want it to be welcoming. Attractive, manicured front-yard landscaping will also add value to your home. And don't forget about your backyard.
3. Add Outdoor Living Space
According to Remodeling Magazine's "Remodeling Cost vs. Value Report for 2007," more than 85 percent of your wooden deck's cost can be recouped if you sell your home, compared with 78 percent of a bathroom remodel and 68 percent of a family room addition. If you're going to add a deck, take some time to come up with an interesting shape, and consider adding enhancements such as a built-in fire pit, benches or raised garden beds. Using higher-grade materials for the flooring and railings not only further enhances this addition, but can make it easier to maintain, too.
2. Modernize your Living Space
If you are not up to a complete bathroom or kitchen makeover, look at an upgrade. Today's modern homes want modern appliances, plumbing fixtures and stylish tile. These upgrades can be done one at a time with a master plan in mind.
1. Improve your Home's Energy Efficiency
If you have read my earlier newsletters you will know that improving your home's energy efficiency is typically the low hanging fruit that will give you a quick return on investment and continue to save you money for years into the future. On top of that, there are federal tax credits and local utilities incentives that will recoup your costs more quickly. In order of priority, air sealing your attic, crawl space and HVAC ductwork are typically the most effective way to lower your heating and AC bills. Adding additional insulation to your attic or crawl space comes next and energy star standards dictate at least 12" of attic insulation and 6" of floor insulation. If your home is older and has inefficient wood windows with single pane glass or older doors, replacing these is both an upgrade that adds visual value as well as energy efficiency. However, newer homes with dated double pane windows will not see a return on investment because the cost of new windows is so high and the energy efficient improvement on Energy Star windows will be marginal.