Owning a home isn’t only an emotional experience. It’s also a financial decision that can pay dividends as you build up equity in your home and see your property value increase over time.
The rate of this property value increase can depend on a number of different factors, including the community where your home is located, local demand for housing, and the economy as a whole. But homeowners can also affect their home’s value over time by making upgrades and changes that increase its appeal and merit a higher selling price.
Whether you’re planning to sell in the near future or you simply want to continue to grow the value of your home investment, there are many steps you can take to increase the value of your home. Here are six proven strategies that can pay dividends when it finally comes time to sell.
1. Update your home’s finishes.
Superficial changes can make a bigger impact on buyers than more intensive renovations. Many real estate agents rave about the difference a fresh coat of paint can make—especially given the low cost of this upgrade.
Some experts argue that a fresh coat of paint throughout your house can increase the home’s sale price by as much as 5 percent. Other simple upgrades, from replacing old light fixtures to changing out your front door, can also give your home a nice bump in value.
2. Upgrade to energy-efficient features and appliances.
Energy-efficient upgrades reduce your utilities bills while you own the home. When it comes time to sell, these upgrades will also offer more appeal to buyers, many of whom are interested in energy-efficient features to lower their own costs as a homeowner.
If your home currently features old appliances that guzzle energy and date your interiors, an upgrade—even if it’s installing modestly priced modern appliances—can help you net a higher sale price.
3. Freshen up your curb appeal.
Simple landscaping features such as new plants and fresh mulch can help your home make a great first impression.
4. Put your money into your kitchen and bathroom.
Many real estate agents will tell you that kitchens and bathrooms are the rooms that sell homes.
In many cases, a kitchen or bathroom remodel can offer a 100 percent or greater return on your investment—and that number could be even higher depending on the finishes you choose, the amount of labor you’re willing to do yourself, and how much of an upgrade these changes offer over your home’s current condition.
If you have a renovation budget, kitchen and bathroom upgrades are the best way to increase the value of your home.
5. Finish off your basement or other unfinished spaces.
Finished square footage is an important calculation when determining your home’s fair market value.
Even if you don’t want to invest in a heavy-duty makeover, simple steps like putting up drywall and adding carpet to a room can turn unfinished space into a profitable addition to your home. This allows you to increase the value of your home by expanding the footprint of this finished space.
6. Clean and declutter before showing your home.
When you’re selling or getting an appraisal on your home, a little deep cleaning can go a long way. Take this opportunity to dust in high places, wash your baseboards, give floors a good mop, and haul excess junk and clutter to a donation center.
Bonus tip: Use a fresh coat of paint to revive worn spots.
Is your home looking a little worn, inside or out? A DIY paint job carries a low cost for materials, but it can have a big impact on the eye appeal of your home.
Whether you’re painting your living room, bedrooms, or even just the front door of your home, a bright coat of paint can make old surfaces look brand-new—and add some instant charm to your home.
Selling a home can be a great way to pocket some profit after taking good care of that property as your equity grows. With some simple, budget-friendly tricks to beautify and update your home, you can push that potential sales price—and your earnings potential—to its upper limit.
Discover more financial strategies for leveraging your home’s value—download The Smart Homeowner’s Guide to Refinancing today.
*Originally published June 2020. Updated March 2022.