There are ways to increase the value of your home before putting it on the market. The key is to spend money in the right places to achieve the highest return on your investment. A home that gains value over time can provide a big financial advantage when you’re ready to upgrade to a larger, nicer home. When your home’s value rises, the loan becomes less risky to the lender because its loan-to-value ratio decreases.
While you are planning your budget and the profit you hope to achieve you must ensure you don’t overcapitalize. This is where the cost of your renovation outweighs the market value it will add to your investment property. Knowing what the property’s current estimating market value is, where the opportunities exist to increase its value, and an estimation of the work involved will ensure you stay within your budget.
Many homeowners make an effort to increase the value of their homes by adding things below.
- Upgrading high-end finishes
- Invest in Energy-Efficient Home Features
- Spruce Up Your Landscaping in the Front
- Spend Upgrade Money in Your Kitchen and Bathroom
- Increase Your Finished Square Footage
- Cover Up Rough Spots with a Fresh Coat of Paint
- Make it Low-Maintenance
- Convert Your Garage to Living Space
- Make the Living Area Open-Plan
- Replace Worn Carpets or Rugs
- Add Value to Your Home with a New Heating System
- Rewiring and Replumbing Old Houses
- Add Bifold Doors
- Invest in Solar Panels
- Add an Extra Bedroom
- Create a Driveway
Ways to Increase the Value of Your Home are explained below.
1. Upgrade High-Demand Finishes
Examples of high-end finishes include
- Replacing old countertops with polished granite, quartz/ marble and soapstone
- Luxury appliances such as stainless-steel fridges, and ovens.
- Replacing yellow incandescent bulbs for brighter LED lights.
- Replace old cabinet door handles and lock with brushed nickel alternatives.
Exterior high-end upgrades include an outdoor kitchen, planting mature plants and using quality materials when upgrading. These high-demand upgrades and finishes will increase the value of your property.
2. Invest in Energy-Efficient Home Features
Energy-efficient homes are built to save and minimize energy consumption without sacrificing comfort. The appliances, construction as well as significant features of a home can all have an influence on its efficiency. A house that is more energy-efficient might give more comfort to tenants. Moreover, using less energy is not the only aspect of energy efficiency. It involves making the most of what you have and minimizing waste. When you minimize the greenhouse gas emissions which cause climate change, for instance, your energy-efficient home contributes to the battle against global warming.
A review of one Australian and other international studies by a research fellow at the Sustainable Buildings Research Centre at the University of Wollongong has revealed homes can sell for more if they have a higher energy saving rating. Researcher Daniel Daly indicated homes that had a high energy-efficiency rating would sell faster and up to 5 – 10% more on the selling price. Examples of Energy Efficient changes that will increase the value of your home include updating your water system, investing in isolation, making use of solar panels to reduce your costs, and improving efficiency by installing double glazing or window films.
3. Spruce Up Your Landscaping in the Front
While increasing your home value with other recommendations, the outside of the property also known as curb appeal plays an important role. Your yard should be well maintained, trimming overgrown plants, maintaining your lawns, planting trees, building a patio and a water feature are suggestions to increase the value of your home up to 10%.
4. Spend Upgrade Money in Your Kitchen and Bathroom
Updating your kitchen interior appliances, and replacing old styles and finishes will leave a strong impression on new homebuyers. Upgrading your kitchen will not only help the kitchen look sleek and modern, but will also make cooking and cleaning easier with state-of-the-art technology.
If your home has one bathroom, adding a second bathroom and replacing outdated fixtures and tiles in your bathroom with modern ones can increase your home’s saleability. Small changes can have the most lasting impact. The value of your property can increase by 10 % by making these changes.
5. Increase Your Finished Square Footage
Increasing your finished Square Footage according to a study for the National Association of Realtors, every 1,000 square feet added to a home increases its sale price by at least 30%. Consideration should be given to converting roof space into an office, guest bedroom or extra storage space
Knocking down the wall that separates your kitchen and living room increases square footage and if you are unable to knock down walls, you could consider a rear or side extension. Adding potential value to your home.
6. Cover-Up Rough Spots with a Fresh Coat of Paint
Using Interior and exterior fresh coats of paint to cover up rough spots is the easiest and most cost-effective renovation you can do prior to marketing. The important factor to keep in mind is choosing the right colours that are modern and won’t date quickly.
It is estimated that ROI on an exterior paint job is 51% while Consumer Reports says that enhancing your home’s exterior, including paint touch-ups, can boost home value by 2-5%.
7. Make it Low-Maintenance
Low maintenance gardens for rental property investors are very important as tenants may not be gardeners which can lead to the outdoor being left in disarray and in desperate need of fixing once it comes time for your next tenants to move in. The following are ideas to keep your garden low maintenance and increase the value of your home.
- Low-maintenance plants that don’t need a lot of attention and water
- Artificial turf – Pristinely manicured lawn without any of the upkeep and watering of grass
- Creating a Hedge is durable and is unlikely to die off regardless of how much effort is put into its upkeep, creates privacy and beautiful addition to your garden
8. Convert Your Garage to Living Space
If you have sufficient parking space outside you can consider converting it into a living space. The potential value-added can be up to 15% in value increase. Garage conversions are subject to building regulations.
9. Make the Living Area Open-Plan
Make the living area open-plan and increase your properties by 3% to 5%. You can transform your home and save on the cost of an extension by knocking down the wall that separates your kitchen and living room. If knocking down an internal wall is not possible you could consider a rear or side extension.
Removing walls within properties opens up smaller rooms and makes these areas look and feel bigger than before increasing the values of properties
10. Replace Worn Carpets or Rugs
If you want to create a big impact and positive impression, replace worn carpets or rugs. Carpets in both wool and synthetic fibres will add visual impact to your property due to the comfort and practical benefits they present to buyers. Modern carpets are manufactured to resist soiling, staining spills and even fading so young families don’t have to shy away. If you financially cannot afford to do it, have your carpets professionally steam cleaned.
11. Add Value to Your Home with a New Heating System
In the UK and Europe, mandatory energy ratings have been in force for more than a decade and it is slowly catching on in Australia. It encourages homes built or renovated to high energy performance and increases the value of these homes. Once regulation changes and you have started incorporating a new heating system in your home you will have added value to your home.
With the most efficient heating system types, you can reduce your bills by up to 70 %.
12. Rewiring and Replumbing Old Houses
Most buyers will request a survey on a property before purchasing. If the electrical installation is not to a good standard it could affect the asking price. Rewiring and Replumbing Old Houses will give future buyers peace of mind. A rewire is a major project but definitely worth doing. A basic bathroom remodel with a plumbing upgrade will bring back nearly 66% of your investment when you sell your house?
13. Add Bifold Doors
Where most properties are small, and you try to create a room that feels spacious, filled with light and well ventilated then Bifold Doors are being installed. Effectively, you are saving space when compared to an ordinary door that swings open. Other benefits include offering better insulation as well as soundproofing when shut.
Some experts estimate that bi-folding doors can add around 5-10% to the resale value of a property.
14. Invest in Solar Panels
According to recent solar research done by Zillow Installing solar panels in a home not only helps to reduce current monthly utility bills but can also potentially increase the home’s value by up to 4.1% more than comparable homes with no solar panels. Investing in solar systems is a capital investment similar to modern kitchens or bathrooms.
15. Add an Extra Bedroom
An extra bedroom can add up to 15 % to the value of your home.
Adding an extra bedroom is a significant way to add value to a property. Adding an extra bedroom can cost on average $50,000–$80,000 but can have a massive financial upside. Properties are typically valued on the number of bedrooms, properties with three to four bedrooms can range from two to four hundred thousand in property value increase.
16. Create a Driveway
Driveways make up an important part of a potential buyer’s first impression of the home; driveways or those with old, cracked concrete can reduce a property’s value, so are a great place to invest. On estimate, a driveway can increase your property’s value by 5-10%.
When it comes to driveways there are a number of other benefits: Off the street parking has become important to home buyers and paved driveways will require less maintenance than lawns or gardens.
What are the common mistakes during home value improvement?
While homeowners are busy with renovations they realize they’ve made costly home renovation mistakes. These mistakes can cause unplanned costs, additional funding and delays.
- Failing to be specific about what you want
- Opting for the least expensive contractor
- Disregarding the home’s infrastructure
- Not budgeting for the renovation’s impact on daily life