It’s a common mistake – homeowners spending thousands of dollars in upgrades then finding their home isn’t worth what they thought. Or you find it difficult to sell because those upgrades you made don’t appeal to a wider market. For this reason, choosing what upgrades you make, and how you do them, is crucial if you’re planning to sell your home in the near future. So which ones increase the value of your home, and is it worth your while doing them?
To Upgrade or Not To Upgrade?
The first question to ask yourself is ‘do I want to upgrade’? What are your reasons for wanting to make upgrades to your home – is it because you would like to make use of the upgrades yourself or is it because you want to increase the value of your home and make it more saleable?
If the former then it doesn’t matter quite so much which upgrades you choose. If you’re planning to stay in the home for many years to come you should choose upgrades because you like them.
However, if you’re upgrading with the specific purpose of increasing the value of your home and improving its saleability you need to be far more careful about what you do. Choose the wrong fixtures to upgrade, or ones that are too personal in taste, and you can actually end up losing, not making money.
Do Your Research
Research is the first thing you should do when considering upgrades to your home. You should find out what the ceiling price is for home sales in your street or neighborhood and then calculate a budget based on this. For example, if homes do not generally sell for more than $250,000 and your mortgage is $225,000 your margin is only $25,000 – though remember you would need to subtract real estate agent’s fees and other costs from that amount anyway, so in reality it’s actually even less than $25,000. There would be no point in this scenario in paying thousands of dollars for marble countertops because you won’t make the money back.
You would be far better off spending a couple of thousand in making your home as presentable as it can be – perhaps new paint, light fixtures, and fixing some maintenance issues.
A real estate agent will happily be able to give you the information you need on what homes are selling for in your neighborhood so that you can determine a budget. Agents can also be a vital source of information in helping you choose which upgrades to make as this is the next phase of your research.
Which Upgrades Will Increase the Value of Your Home?
Choosing which upgrades to make, and making wise decisions on those upgrades, can be the difference between making or losing money. Kitchens and bathrooms always top the list in terms of payback, but only if done properly. There’s no point in spending tens of thousands on a new kitchen or bathroom only to have it installed by an amateur – it will show after all. Use professionals for installation and you can make a cheaper bathroom or kitchen look like it’s high-end.
Be careful when choosing the style as well. If you’re upgrading to sell – or are considering selling within a few years – you should choose styles that will appeal to as broad a market as possible, and that will not be out of fashion in a few months. The colors and types of material you use will have a great impact on how good the home looks when it’s time to sell, but don’t necessarily be driven by personal choice. Marble and other natural countertops are being demanded more and more these days, but be sure to choose a neutral color and pattern.
Likewise in bathrooms choose the fixtures carefully. Make sure faucets and lighting look good and match the rest of the home – you wouldn’t choose an antique style faucet in a modern home, and similarly a modern faucet and vessel sink could look out of place in a period home.
Kitchens and bathrooms are usually said to yield between 75 and 100% return on investment, so these are definitely the best places to spend your money. But other upgrades can yield a high return too – hardwood floors should bring you between 50 and 75% return, while simply painting your home can bring back between 50 and 100%.
Helping to Sell Your Home
At the end of the day we want to know what upgrades will increase the value of a home, but it’s also important to note that certain upgrades will help you to sell your home as well.
Buyers’ won’t enter a home and be wowed by a new furnace, but a more ‘invisible’ upgrade like this is actually money well spent. A new furnace or heating system is said to bring you a 50 to 80% return on investment so this can increase the value of your home, but it also makes the home more saleable. The two things are intrinsically linked after all – upgrades can increase the value of your home and make it easier to sell – the quicker it sells the more money you make back.
So the key is not to jump into making upgrades – do your research first; talk to a real estate agent and find out about home sales in your neighborhood and ask their advice on which upgrades they would recommend in your home. Armed with this information you should be able to increase not only the value, but the potential for a fast sale of your home.