Real estate is considered to be a fairly solid investment, and your home is no different. For the most part, houses tend to appreciate rather than depreciate over time. While there are always exceptions to this, part of the reason for this is that homeowners tend to invest in upgrades and improvements over the years that lead to an increase in the value of the home. Sometimes, appreciation is due to an increase in land value, but that is not something you can control. What you can control, however, is appreciation due to your own investments in increasing the value of your home. Here are 3 protips to help you increase the value of your home.
1. Less "sexy" improvements often bring the greatest ROI
When it comes time to invest money into upgrades and improvements for your home, your natural inclination is to invest in what you will enjoy most. While there is nothing wrong with this and you should enjoy your home, just know that not all upgrades bring a comparable ROI. While you may fall so in love with hand-hewn shaker cabinets for your kitchen that you are willing to invest heavily in them, a potential buyer may look at them and feel they are the first thing they will need to get rid of.
Most buyers will walk in and start thinking about cosmetic changes they want to make, so investing heavily in decor or upgrades that are taste or style dependent will not improve your resale value. On the other hand, new home buyers are going to want to invest in tailoring their new home to their style and taste, so improvements like a new roof or new furnace are not things they want to think about having to spend money on for a few years. That makes those the best investments for you to make to get the best value for your home in a sale.
2. Upgrade for the neighborhood
Neighborhoods change over time, so you want to be making upgrades that are going to be attractive to the market segment you are trying to sell your home to. If you live in an area with an excellent school system, your home will be in high demand for families. Investing in "family friendly" upgrades like a swimming pool or adding an extra half bath can significantly boost your home's resale value. On the other hand, if you live in a neighborhood that is rapidly filling with upwardly mobile young couples from the tech world, upgrading your tech by installing a home theater or smart thermostat will bring you the best ROI.
3. Beware DIY
If you are a carpenter, builder or contractor by trade, then installing your own deck is a pretty safe investment. If you are tackling that kind of project for the first time, however, it's best left to the pros. Outdoor structures are considered house additions and often require building permits to be a legal part of the home. While failing to have a necessary permit will most likely not cause you any problems for your own use, it could come back to haunt you when you try and sell the home. If you don't have the necessary building permits for any upgrades or improvements you do, they may have to be torn out or torn down at your expense before the home can be sold. While you may save some money on the front end by doing any kind of structural renovations on your own, it may end up costing you dearly on the back end. When it comes to DIY improvements, stick to cosmetic improvements like paint, wallpaper or a tile backsplash.
When it actually comes time to sell your home, there are a number of last minute things you can do to help your home be more attractive to buyers. Getting rid of personal items, staging your home and paying for professional photos to be taken of your home are all smaller things you can do to give your home an edge in even the most competitive of markets.
