Top Home Improvements: Get the Most Bang for Your Buck
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Want to boost your home's property value before you sell? Upgrade your front entry with a steel door. According to a 2015 study by Home Remodeling Magazine, this home improvement project has the best chance to increase property value. Not all home renovations add value, however, so choose your remodeling projects carefully. Even if you're not planning to put your home on the market in the very near future, you can make it safer, more comfortable and more energy efficient. Financial institutions offer loans and financing that can help you accomplish your home improvement goals.
Best value-adding projects
In its "Cost vs. Value Report," Remodeling Magazine compared the average cost of a home improvement project with what real estate agents estimated to be the resulting average median price increase. The projects where value exceeded cost include steel entry and garage door replacements, a new roof and fresh vinyl siding.
Poor value-adding projects
As much as you yearn for a spa-style tub and a dual-head shower in your bathroom, don't expect it to increase your property value. If your goal is to sell your home at a higher price, you could be wasting your money. The cost-value study puts a bathroom addition value at about one-third of the cost. The value on a bathroom remodel can range from barely moving the needle to resting in the negative column. Other home remodeling projects with poor return on investment include a deck addition, sunroom, major kitchen remodel and second-story addition.
While it's important to make home improvements that tend to increase your home's value, some changes are just plain necessary — for instance, you might need an addition to make room for your growing family while you're waiting for the housing market to improve. On the other hand, some improvements can make the difference between selling and not selling your house. If the tile and countertops in your bathroom and kitchen could star in a snapshot for Throwback Thursday, it's time to update your home's décor. An outdated plumbing or electrical system can make your home undesirable, too. Any projects that solve safety and structural concerns should also be on your renovations list.
Paying for home improvements
A popular way to pay for renovations is through a home equity loan or a home equity line of credit. You can make that loan work for you by opting for remodeling projects that improve your home's appraised value by at least the amount of money you spend. If you complete the project before selling your home, you'll have the added bonus of enjoying the changes yourself.
When choosing home improvement projects as an investment in your property value, think carefully. Consider your goals before you decide which remodeling projects to tackle. Your dream home could turn into a nightmare if the return doesn't meet your expectations.