Home Improvements That Really Increase Your Property Values
One of the myths that I learned about real estate is your property doesn’t increase its value according to your investment. What does that mean?
For example, you stay in a house for 4 years. Now it’s worth $180,000 and you want to sell it. You would like sell at higher price by increasing your home’s value. You take out $20,000 to do home improvements and try to sell your house at $250,000. You sell higher because you think that your home improvements have increased the home’s value tremendously. However, at the time you only get offers at $190,000 from the market. You feel strange and don’t know what has happened.
Yes, theoretically home improvements should increase your home’s value. However, in reality, it is not 100% sure that it will hit your expectation or even pay back what it has cost you. This is because not all home improvements are created equally. Again, home improvements are considered as some kind of investment which has some risks.
Which Home Improvements can Pay off Itself?
In general, there are 2 factors that will affect how your home improvements payback its value:
- Region and Neighborhood
- The house section that you improve
Region and Neighborhood
This is all about the market demand. Generally speaking, if your property is located in an area that is a hot real estate market, then your property can appreciate rapidly in value. In this case, no matter what kind of home improvements you do, most likely your cost will be covered due to the high demand of the market.
Besides that, you also have to take into consideration the market demands on the property structure. For example, your property located in a market that full of people who need more bedrooms. So if you can increase the number of bedrooms from 3 to 4 bedrooms, most likely you can sell your house in higher price.
The Section that you improve
I heard that one of the most popular home improvements project is finishing your basement. However, it also has the lowest return of investment (ROI). The average pay back for finishing a basement is less than 50%. So if you spend $20,000, you can only expect to increase your home value at less than or equal to $5000.
How and which part you improve in your house is really a big factor. It can determine how your house value being valued. Without further ado, below are some of the improvements that potential buyers are most likely to pay for:
- Kitchen improvements – Kitchen is the heart of the house for most buyers. The condition and functionality of the kitchen will directly affect the buyers’ decision. This is an important point that you must consider.
- Adding New Space – Please remember that improvements that increase the functional space of a house can hold its value better than ones that just make a house look better.
- Extra Bedroom – Personally I think that how you improve your house depends on your targeted market. If you targeted market is family, then an extra bedroom might be a good investment. However, if you are targeting on other market, you have to think properly as extra bedroom will reduce the space of your house.
- Decks – Installing a deck may be the most reliable investment since it can add extra square footage to your home.
- Basic Improvements – Let’s go back to the basic. People like to buy a good condition house. This is the most basic needs of potential buyers. So the most important improvements you would want to is to maintain the entire house. Take care of problems of they arise especially in areas such as the roof, plumbing, doors, windows etc.
Think Twice Before You Action
Like what I said, home improvements are investment and they have risks. So if you are planning to sell and considering making improvements in order to increase the selling price, do your home work first. I would suggest you to consult experienced realtors, builders or real estate agents. They are experienced in property and they can provide you with good advice.
Totally agree on maintaining and continuing with basic improvements.
Since moving into this 5 br home 18 months ago, we’ve improved and updated much of this home but only with cash available (approx. 5-6 thousand)
We are currently looking at stripping and polishing our slate floor massive job for a DIY person and expensive for someone else to do.
However, maintenance I guess is the most important part of this exercise.
If the slate isn’t coated correctly it will deterioate rapidly.
Guess we’re goinna have to fork out another 2 grand in the next 6 months or so - coz I don’t think I’m up to the job.
You can also take advantage of using plants to increase your curb appeal. Plants add color and beauty to a home.
Put a pot of beautiful flowers near the entrance so prospective buyers will feel welcomed as they enter.Flowering shrubs and bushes add appeal to the eye as well.
Always make sure the yard is well manicured of a property you are trying to sell.