Looking to add value to your home without breaking the bank? Regular maintenance and well-chosen upgrades can make a significant impact. Before diving into renovations, it’s important to know which projects provide the best return on investment (ROI) and which may not add as much value.
Smart Ways to Add Value to Your Home
On average, homeowners recoup 68.3% of the cost of home improvements when they sell the home within a year of the project’s completion. This is based on 23 projects evaluated during a While most projects won’t increase the value of the home beyond the actual cost of the renovation, some upgrades can add considerable value and functionality to your home.
Before beginning a renovation, it’s important to consider different factors that can affect your home’s value, such as nearby school districts, the condition of surrounding properties, and housing market trends. In some cases, a renovation or remodel may be beneficial for you personally but won’t necessarily increase resale value. If you have questions about the value of your home related to the area in which you live, speaking with a real estate agent may be in your best interest.
If you decide you’d like to improve your home, the following options may be worth considering:
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- Upgrade insulation. Installing new insulation to a standard attic space can cost you around $1,500, but it has an impressive return of approximately $117 for each $100 you spend, for a total added value of around 117%.
- Add a fresh coat of paint. Paint materials run around $150 if you DIY. By incorporating a new, neutral paint color, you could boost your home’s appeal.
- Boost curb appeal. Simple landscaping tasks like trimming shrubs, painting the front door, and replacing worn siding can enhance your home’s overall value.
What Upgrades Add Value to Your Home?
While small projects can go a long way, you can also consider larger projects to add more value. These include:
- Installing new garage doors. Average cost recouped 194%
- Adding steel entry doors. Average cost recouped 188%
- Adding stone veneer. Average cost recouped 153%
- Minor kitchen remodel. Average cost recouped 96%
Adding square footage, such as finishing a basement or building a sunroom, can increase your home’s equity. However, not all space additions are equal.
For example, building an addition or a space such as a sunroom would help increase your home’s square footage, which could increase your equity. On the flip side, finishing the basement may add desirability to the home but may not improve the equity. Another instance would be creating an extra bedroom through an addition may offer better returns than cosmetic upgrades like new kitchen cabinets.
Projects That Might Not Pay Off
If you’re thinking about larger renovations, keep in mind that not all projects yield high returns.
Home improvements that are known to add less value include:
- Adding a bathroom. Average return of 35%
- Adding to the size of a master bedroom. Average return of 36%
- Adding a metal roof. Average return of 50%
While these improvements do usually recoup some of the investment required to complete them, they do not add as much value at resale.
Save Money with Smart Upgrades
Some home improvements can actually save you money.
Solar panels. With an overall out-of-pocket cost of around $33,272 before incentives (the federal tax credit can drop this by 30%), the payback period for solar panels, or how long it takes to recoup the price, is 7 years. If you plan on staying in your home for the long term, this may be a worthwhile investment, as it can offset future electricity costs by 93%.
Energy-efficient windows. Another option for investing upfront to save money in the future includes installing ENERGY STAR®-certified windows, which can reduce energy bills by 12% while increasing the home’s retail value.
Low-flow fixtures. Installing low-flow water fixtures like showerheads and faucets can reduce water consumption by 30% and lower your utility expenses.
After completing any home improvement project, make sure you keep your receipts and record how much you spent on the improvement, as the information may come in handy for tax purposes when you sell the home.
Deciding to upgrade your home is a personal decision with many considerations. If you decide to proceed with an upgrade listed above or another home improvement project, consider learning more about equity loans offered by PSECU. We can provide you with the information you need to move forward.
Stay Organized with Home Maintenance
Maintaining your home doesn’t have to be overwhelming. By performing regular preventative maintenance, you can avoid unexpected costs that could otherwise occur. Create a maintenance calendar to track tasks, such as changing HVAC filters, cleaning gutters, and inspecting your roof. Simple DIY projects can save you money, but if you have any questions or concerns about projects, it never hurts to call a professional.
Leverage Your Home’s Equity for Future Projects
Maintaining and improving your home is an important investment and leveraging your home’s equity can make funding these projects easier. At PSECU, we offer home equity options to help you transform your space, whether you’re upgrading for efficiency, adding square footage, or tackling long-overdue repairs.
By using your home’s built-up equity, you can finance any size home improvement project and potentially increase your home’s overall value. Explore our home equity options and see how we can support your home improvement goals.
