If you’re looking to sell your home, you’ll want to make sure any renovation projects you embark on will increase home value. Certain projects will boost your return on investment, while others simply won’t.
Cover the basics
If you are selling your home, the most important thing you want buyers to know is its condition. To offer your home at its best, take a look around and make a list of any essential repairs or upgrades. Often, the most basic upgrades or home renovations can increase home value.
- Basic exterior home renovations improve the condition of your home. A simple, fresh coat of paint is one way to improve the exterior look. Because of wear and tear, the siding and trim may need to be repainted. You can also paint or replace a dated garage door to freshen it up.
- Renovating the roof will increase home value. A renovated roof assures buyers that the home is in good condition, especially if you’re selling an older home. The last thing buyers want to worry about is a leaky roof. Not only will a new roof make a good impression, but it also increases the value. With any renovation, it’s a good idea to have your documentation on hand to show potential buyers.
- Well-maintained landscaping adds curb appeal. Buyers are attracted to homes that look great from the street. Sometimes all you need to do is keep the yard trimmed and well maintained. Remember, the degree of curb appeal is the first thing buyers see.
Improve the most-loved rooms
While the exterior of your home is important, don’t leave out any necessary updates inside. Some areas you should consider renovating before selling your home are the kitchen, bathrooms and overall living space. Amid the pandemic, buyers have been searching for larger homes with plenty of space.
- Families spend most of their time in the kitchen. The pandemic kept most people indoors and away from eating out, meaning more cooking at home. Just a few minor kitchen renovations, like re-painting cabinets and drawers and changing knobs and handles or fixtures, can make a difference. Even changing the light bulbs can really brighten up your space.
- Don’t forget to touch up the bathrooms. Sometimes bathrooms are overlooked and only minor updates are needed. You can change dated faucets or replace the light fixture with an energy-efficient one. Energy-efficient fixtures will also save money on utility bills.
- Open floor plans have become essential for buyers. Buyers are looking for larger homes with more space. In addition, since so many people are now working from home (thanks to the pandemic), buyers opt for home office spaces. Either adding a living area or converting existing space into an office can increase home value and your odds of selling your house.
Calculate a project’s ROI
How do you decide which home renovations are worth it? If you have several projects in mind, remember it’s best to keep renovations simple. When buyers see your home, they will picture their own belongings and designs. With this in mind, calculating the return you anticipate from selling your home can help you prioritize renovations that get you the best value.
- What is the return on investment? The return on investment (ROI) measures how improvements affect the value of your home. It is a ratio of your net return on investment to your total expenses. The higher the ratio, the greater the home value will be due to the improvements. The net return on investment is simply the final value of your home minus the initial value of your home.
- Determine the total cost per project. To calculate your ROI per project, you first need to know how much a project will cost. Make sure to add up all the expenses involved, such as supplies, labor, permits and fees, as well as any interest payments on loans. If you need help, try using some basic ROI calculators.
- Every project brings a different return. Depending on the market and buyers, some projects will yield a high return, while others may not. Calculating ROI per project is one way to help you determine where to best spend your money. Remember that putting more money into a project may not result in a higher return.
Whether you’re selling your home, thinking about home renovations or looking to refinance, First Centennial Mortgage is here to help answer your questions. Please speak to any of our trusted mortgage loan officers and find the best option to meet your needs.