How do you build equity in a home while simultaneously enhancing your everyday life? By making home improvements that add value to your property. Not only will improving a home allow you to build equity quickly and efficiently, but it will also make your life more comfortable on a daily basis. Of course, you don’t want to improve or add just anything to your house. Instead, be strategic about the specific improvements you decide to make to your home. In other words: choose improvement projects that will give you the most bang for your buck when it comes to adding value to your property.
Fortunately, we’ve done the research for you. If you’re looking to build equity in your home, and the property is lacking in these areas (think: a dated kitchen or lack of curb appeal), then these projects are an excellent way to add thousands upon thousands of dollars of value to your home. Here are 5 home improvement projects that will likely add value to your home.
5 home improvements that add value to a home
Ask any homebuyer what they look for in a home, and you’ll be hard-pressed to find one who doesn’t place value on curb appeal. After all, you can have the best interior in the world but without attractive landscaping and front exterior, few buyers (if any) will be charmed. Even a simple, well-maintained lawn can go a long way in building equity in your home. However, Money Crashers warns that going overboard with landscaping (i.e. adding fountains, expensive plants, etc) will not necessarily add value to a home. Instead, the website encourages homeowners to “wow potential buyers with a well-kept lawn, and some well-laced shrubbery or small trees.” These front yard house changes tend to “recoup a decent percentage,” according to Money Crashers.
Energy efficient windows
Tired of living in a home with old, drafty windows? Fortunately, this is an easy fix. Simply replace your old windows with new, energy efficient ones, and you’re sure to increase your home’s value (and decrease those monthly energy bills). While new windows aren’t cheap, they do end up saving you money in the long run. They also make it easier and faster to heat and cool your home throughout the year, which means you can kiss those high utility bills goodbye. In fact, according to Money, “replacing old windows with newer, energy-efficient ones can save you anywhere from $25 to $450 a year in heating and cooling costs.”
Outdoor deck addition
Everyone (especially a homebuyer) loves having an outdoor deck for lounging, eating and grilling. According to Remodeling’s 2019 Cost vs. Value Report, adding a wood deck addition to your home yields a return of more than 75 percent. The report notes that this return is for a 16×20 foot deck addition using pressure-treated joists. According to Money Crashers, the cost of adding a deck varies widely depending on materials and size, however, most decks cost anywhere from $1,200 to $10,000 or more. Though pricey, these decks will ensure you have plenty of outdoor space to enjoy while also building equity in your home.
Having updated or new bathrooms in your home will go a long way in attracting potential buyers down the road. Since it’s a room that you and guests use on a daily basis, many consider bathroom remodels to be well worth the money, time and effort. According to Remodeling’s 2019 Cost vs. Value Report, a mid-range bathroom remodel will cost you around $20,000. When homeowners sell the home, they should be able to recoup around 67 percent of their investment. In many cases, you can remodel a bathroom for under $20,000 when you choose affordable and reasonable finishes from Home Depot and Lowe’s.
Kitchen remodels can either be extremely expensive or fairly affordable, depending on the finishes and appliances chosen. While it’s certainly never cheap to redo a kitchen, it doesn’t have to break the bank either. Those that choose high-end, luxury finishes, such as marble countertops, custom cabinets and designer backsplashes, could end up paying upwards of $100,000 or more. However, those that choose less luxurious finishes can easily redo a kitchen for $40,000 or less. For many homebuyers, having a spacious, practical and updated kitchen is at the top of their list of needs, making this improvement a must.
Other ways to build equity in your home
In addition to adding value through home improvements, you can build equity in your home through other means including:
- Putting extra money towards paying off home loans – The more money you put towards paying those monthly mortgage bills, the closer you’ll be to owning your home. Whether it’s an end-of-year bonus or money from a side hustle, every little bit counts when it comes to paying off the principle and interest on your home loans.
- Putting more money down at the beginning –If you have the resources to do so, making a larger down payment will lower your monthly mortgage payments and interest on a home. It’s also a great way to build equity in a home almost immediately.
- Giving it time –In general, the longer you live in a home, the more equity you’ll have in that home. So don’t sell a home right away. Give it time, work to pay off your debt and add value to the home. Before you know it (in five plus years), you’ll have built up a good amount of equity in the home.