Top Projects to Increase Your Home Equity
Every year, American homeowners invest countless dollars on targeted home improvements that increase property value. At the same time, others spend thousands of dollars on upgrades that offer very little return. Before you take out a loan or spend your savings on a home project, learn which improvements actually boost property value.
Function vs. Aesthetics
To add real value to your home, focus on projects that offer double impact. For example, don’t just target upgrades that make your home more beautiful. Instead, look for projects that make your home more functional and/or energy efficient. The following upgrades are great options for boosting your home’s resale value.
- Door and windows: These can add some real value to a home; however, you will need to opt for energy-efficient varieties, which bring tax benefits and lower utility bills.
- Attic bedroom: Any time you are able to turn a useless room into something functional, your home will become more valuable.
- Steel security doors: This simple upgrade consistently offers the highest investment return of any home improvement project in the upscale or midrange category.
- Kitchen: The heart of any home, the kitchen offers all sorts of upgrade possibilities. Even the smallest improvements and additions can add value to your property.
- Decks: In addition to enhancing the beauty of your property, a deck will also extend your home’s living space.
- Siding: Cost-effective and attractive, exterior siding improves a home’s beauty and durability.
- Basement: Increase your overall living space by transforming your basement into a spare room or office. You can also turn it into an apartment to create actual revenue.
- Bathroom: Like kitchens, bathrooms offer all sorts of opportunities for upgrades. New hardware, counter tops and low-flow toilets can add to your home’s resale value.
- Backup power generator: Since they can restore power during an outage, even small, compact generators can bring instant value to a house.
- Additions: These are certain to add value to a property. That said, they can also price your home above the local market.
Be Wary of Swimming Pools
While they may bring hours of backyard fun, swimming pools are usually bad investments when it comes to increasing home value. Typically costing between $20,000 and $50,000 to install, in-ground swimming pools bring very little return. Often called money-pits, these features can cost approximately $2,000 a year to maintain and hundreds more to heat and insure. Over time, wear, tear and cracking can bring up to $10,000 in resurfacing costs.
The National Association of Realtors’ National Center for Real Estate Research estimates that an in-ground pool can add about 8 percent to a property’s resale value. That said, this can vary wildly, depending on its location in the United States. When you factor in the installation and maintenance costs, this investment doesn’t make much sense. Above ground pools can be even worse, despite costing much less. In fact, the Center for Real Estate Research says these eyesores can actually result in a 2 percent lower asking price.
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