Many homeowners undertake renovations with the hopes that they will boost their home’s resale value. But what they may not realize is that the ROI on certain projects can actually be negative. That’s why it is important to choose the right home improvement projects for your needs and budget. In order to make sure that your renovation will give you the best return, here are a few things to keep in mind.
1. Home Improvement Definition
The term “home improvement” is often used to refer to remodeling or renovating a house, but it can also apply to any additions, changes or repairs you make to your property. Some examples of home improvements include painting, resurfacing your driveway or patio, adding new lighting, installing a window or door, sprucing up the landscaping, etc. However, each state has its own laws on what qualifies as a home improvement. For example, some states require a contract with a contractor before any work begins and will require a deposit or full payment before the work is completed. Others will only charge sales tax if the contractor is licensed by the state’s MHIC (Home Improvement Contractors).
2. How Long Do You Plan to Live in Your House?
If you are planning on selling your house in the future, it is crucial to consider how long you will be living there and what improvements will add the most resale value. In general, kitchens and bathrooms are the most popular renovations for improving resale value, but not all upgrades are created equal. Some may cost more upfront but provide a higher ROI in the long run.
3. Considering Energy Efficiency
In this day and age, a lot of people are interested in green building features. Energy efficient upgrades like low-flow water fixtures, smart thermostats, and upgraded LED lights are a great way to add appeal to your home. Buyers will be able to appreciate these upgrades and know that they will save money on utilities in the future.
Putting in a fresh coat of paint is one of the easiest and most affordable ways to upgrade your home’s appearance. It’s an especially good idea if you have any rooms that were painted an odd color, such as the hot pink bedroom your 10-year-old daughter had in mind when she was 11. You could also add crown and base molding to make your home look more refined.
5. Consider Insulation
An upgrade that can both save you money and increase your home’s resale value is boosting your insulation. Adding insulation to your attic or crawlspace can cut down on air leaks and cold spots, as well as reduce your energy costs. It is also a good idea to draught-proof your windows and doors.
It’s important to remember that the amount of money you get back on your home improvement project is linked to the current value of your home and the average price of homes in your neighborhood. So, it’s vital to avoid overbuilding and choosing upgrades that will set your home apart from the competition. It is also a good idea to consult with a real estate agent to determine what updates are most desirable in your area.