Maximize Your Investment: 8 Ways to Increase Home Value
Even in a market where interest rates and material costs are soaring, it still pays to position your home to sell for top dollar. At the very least, upgrading your property means a more comfy and convenient living situation.
Figuring out which improvements are worth the money can be tricky, especially with all the uncertainties rocking real estate. Still, you can try to enhance your home’s value with these high-ROI projects.
1. Improve Curb Appeal
A house with curb appeal, image via Unsplash.
Investing in landscaping upgrades such as well-maintained gardens and outdoor spaces significantly enhances your property’s attractiveness and perceived value. Similarly, upgrading your exterior with fresh paint, updated doors and clean siding creates a positive first impression for potential buyers. According to a university study, these improvements can boost your home’s value by 7% –14%, depending on market conditions.
2. Renovate Your Kitchen
A stylish all-wood kitchen with white accents, image via Unsplash
For years, kitchen renovations have been the quintessential project for boosting property value. 2024 is no different.
The best part is you don’t even have to do a complete makeover to get decent returns. For instance, replacing aging, worn-out cabinets can add 3.63% to your home’s financial worth, while installing high-end appliances tacks on another 2.35%.
3. Touch Up Your Bathroom
Blue accents in an all-white luxury bathroom, image via Unsplash.
Luxury bathrooms are another safe bet when increasing property value. With more people opting to spend quality time at home, spa-style bathrooms with mobility upgrades remain in high demand.
As with kitchen renovations, you don’t need to revamp the entire enclosure — updating faucets, showerheads and lighting can adequately modernize the space. However, avoid using wood paneling and accents, as these elements can exacerbate moisture damage and cap your bathroom’s life span at 15 years.
4. Implement Clean Energy Upgrades
Solar panels on a brick roof, image via Unsplash.
Embracing energy-efficient upgrades benefits the environment and enhances your home’s market valuation. For example, solar panels are increasingly popular thanks to increasing demand for passive, net-zero and sustainable architecture.
The rule of thumb is your home’s value grows by $20 for every $1 saved on energy bills. That means a solar setup saving $500 yearly on electricity could increase the property’s worth by $10,000, on average.
5. Modernize Interior Doors
Glass paneling that makes a statement, image via Unsplash.
Interior door replacements transform your property’s aesthetics, adding a touch of sophistication to each room worth a few percentage points to the overall market value. Moreover, modern glass doors improve natural lighting and make nonverbal communication much easier, minimizing noise and brightening a space. These are all features today’s homeowners and potential buyers greatly appreciate, especially those living in noisy neighborhoods and wanting to cut down on energy bills.
6. Update Your Home’s HVAC
An air conditioning unit outside a home, image via Unsplash.
Installing an Energy Star-rated HVAC system can significantly enhance property value by 5%-7% with an estimated 30% ROI. Newer systems use substantially less power than older models, which can lower utility bills and attract eco-conscious buyers. Additionally, a well-maintained HVAC system reduces the likelihood of costly repairs, making the property more appealing.
7. Install Smart Home Features
A smart home hub, image via Unsplash.
Smart home automation increases convenience, security and efficiency, translating to a 3%-5% higher home value. The key is to be strategic with your selections to maximize ROI and marketability. For example, smart thermostats and video doorbell systems will likely be more attractive to prospective buyers than lighting fixtures.
8. Add Living Space
A minimal-stye modern interior, image via Unsplash.
Are there unfinished rooms in your home? Convert them into usable living spaces. Extra bedrooms, entertainment areas or home offices are a surefire way to increase your property’s worth.
These projects increase square footage, enhancing overall functionality and design. For instance, finishing your basement can yield an impressive 70% ROI — a highly profitable project to undertake.
Funding Your Home Improvements
There are multiple ways to finance your home upgrades without dipping into your savings. Take advantage of the following methods.
1. Home Equity Loans or Lines of Credit (HELOC)
HELOCs let you borrow against your home’s equity. Research shows the average American homeowner has about $200,000 in real property value, which they can use to finance renovations.
2. Cash-Out Refinancing
This can be beneficial when interest rates are low because you’ll refinance your current mortgage for more than what’s left and get the difference in cash. According to Freddie Mac, you can access up to 80% of your home’s value through cash-out refinancing, allowing you to fund substantial improvements.
3. Personal Loans
Taking out a personal loan can be a viable option for smaller, short-term projects. Keep in mind, though, that these loans typically have higher interest rates than home equity products. You want to be careful about borrowing too much capital, especially if the renovation doesn’t have a commensurate return.
4. Credit Cards
While not ideal for large sums due to high interest rates, credit cards can be used for minor renovations or quick fixes. Consider promotional offers with 0% APR for introductory periods to finance small projects without immediate interest.
5. Government Grants and Programs
Various federal and local programs offer grants or rebates for specific improvements, especially sustainability upgrades. For example, you could qualify for a $3,200 tax credit for energy-efficient home improvements, including heat pump installations and window replacements.
Maximize the Value Of Your Home
Increasing your property’s market worth involves a combination of strategic upgrades, modernization and maintenance. Whether you’re looking to sell in the future or simply want to enhance your living experience, making the most of your investment can yield rewarding returns. Focus on curb appeal, energy efficiency and key interior spaces to make your home more appealing to potential buyers or renters.
