Buying a home is a major life achievement. But it’s also an investment in your financial future. While regular mortgage payments build up equity in your home over time, there are upgrades and changes you can make to your home that increase its value quickly, resulting in a big return on your investment.
Homeowners should look for easy, cost-effective ways to increase their home’s value over time, especially if they’re planning to sell in the future. Here are six practical ways to increase your home’s value and get a strong return on your investment.
1. Upgrade to high-demand finishes.
If you’re hoping to sell in the near future, you can increase demand for your home by choosing upgrades that are popular among today’s buyers. This might mean installing stainless steel appliances and/or quartz countertops in the kitchen, as opposed to other finishes that might not drive as much interest, even if they’re high-quality.
Smaller finishes can also affect buyer interest while keeping upgrade costs low. Consider simple changes such as switching from brass doorknobs and locks to brushed nickel material or swapping out yellow incandescent bulbs for brighter LED lights.
2. Invest in energy-efficient home features.
Today’s homebuyers tend to place a greater emphasis on eco-friendly features, due to both a greater focus on environmental issues and a recognition that energy efficiency saves money on their utilities bills.
If you’re upgrading in-home appliances—ranging from your microwave to your furnace—seek out energy-efficient equipment that can lower the cost of your electricity and gas bills.
You might also consider upgrading to a smart thermostat that improves energy efficiency. This kind of thermostat saves you money every month on your utilities bill as long as you live in the home.
3. Spruce up your landscaping in the front.
Real estate agents talk about “curb appeal” for a reason: First impressions have a big impact on the sales value of your home. Affordable landscaping and other modest enhancements to the front of your exterior can help increase its value to both appraisers visiting your house and potential buyers looking for a home of their own.
4. Spend upgrade money in your kitchen and bathroom.
Kitchens and bathrooms are widely regarded as the rooms in a house that make the strongest impression on homebuyers. They’re also the fastest parts of your interior to become dated as appliances, finishes, and other decor fall out of style.
This makes kitchen and bathroom upgrades an excellent place to spend your money. Bathrooms in particular are an excellent option for upgrades and renovations, financially speaking—especially if you’re adding a new bathroom or expanding from a half-bath to a full.
5. Increase your finished square footage.
If your home has an unfinished basement or other unfinished rooms or areas, building out this space can be a relatively low-cost way to add value to your home.
If you build a basement bedroom in an unfinished space, for example, you could easily add more than 100 square feet to your home’s footprint while also adding another bedroom that offers a boost in value to your home.
Many homes are priced by multiplying the square footage by a comparable rate for that type of home in your community, so increasing this square footage is very likely to boost your selling price.
6. Cover up rough spots with a fresh coat of paint.
Home look 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.
While these modest changes can improve the comfort of your home while you’re living there, they can also increase your future list price when it comes time to sell. A home that gains value over time can provide a big financial leg up when you’re ready to upgrade to a larger, nicer home.
Hoping to use your home’s equity to achieve other financial goals? Download The Smart Homeowner’s Guide to Refinancing today.