How to Increase Your Home’s Value
Renovating your home is one of the best ways to improve its value.
But before you get started, it’s important to understand which home improvements increase worth—and which remodels hurt your resale potential.
What types of renovations will we finance?
When you apply for a Renovation Permanent Loan, we will ask you to provide a project scope that includes a renovation contract, plans, and specs. We do not cover non-permanent improvements—so that hot tub you’ve been wanting won’t be part of this project. If you have questions about financing for renovation projects, speak with a Mortgage Specialist
Which renovations typically add the most value?
Adding more square footage
Your home’s value is based on many factors, including total square footage. Let’s say your home has two bedrooms—adding a third could significantly increase the sales price and attract more buyers when it’s time to sell.
Modernizing kitchen and bathrooms
Nothing turns potential home buyers away more than an outdated kitchen or bathroom. If you’re looking to sell in the near future, do some research on which features buyers desire the most. But refrain from going overboard—a gourmet kitchen and spa-sized bathroom may not be a good investment unless it’s standard for your market.
Investing in energy-efficient features
These days, home buyers are looking for ways to cut utility costs and go green with energy-efficient appliances, windows, and installation. By installing double-paned windows, updating insulation, and adding features like a programmable thermostat and high-efficiency water heater, you provide practical value that’s highly desirable.
Repainting your rooms
An easy way to refreshen your home is with a new paint job. Go with neutral colors—white, beige, gray—especially if you plan to sell your home. Home buyers often struggle to picture themselves living in a home where the color palate differs from their own preferences.
Which renovations may hurt your home’s value?
Installing a pool
Beating the heat on a hot summer day seems like a great idea, but not if it involves adding a pool to your backyard. Sellers rarely recoup the costs of putting in a pool, and it may limit the number of home buyers who will be interested in your home. Not everyone wants to deal with the upkeep required to maintain a pool, so keep this in mind before you take the plunge.
Converting a bedroom
Think twice before you turn that third bedroom into a storage closet or library. While this change may add value for you, it could hurt your chances of selling the home later on. Rather than convert the room, use furniture to create the aesthetic you desire— purchase bookcases or an armoire instead of incorporating built-in shelves that require demolition to remove.
Customizing to your interests
You may love the idea of a “man cave” or wine seller, but buyers may not share your same tastes. Try to make renovations that appeal to wide range of interests rather than to a select group.
Over-improving your home
Owning the nicest home on the block may not be in your favor. The value of your home is largely based on neighborhood and location, so if your home’s value exceeds the norm for your area, you may not see a return on your investment. For example, you could spend $100k modernizing a home that was worth $250k before renovation—but if the predominant value in the neighborhood is only $250k, you won’t get $350k out of the property.
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