6 Upgrades That Will Increase Home Value (and 4 That Won’t)
Home upgrades are not only a great way to improve your quality of life, but can also increase the value of your home. Increasing the value of your home can confer many benefits, such as the ability to get larger home equity loans and to secure a better payout if you eventually sell your home. However, whenever you are considering an upgrade for your home, it is important to weigh the cost and the work involved against the upgrade’s potential value. Certain types of upgrades are consistently worthwhile, while others tend to be more trouble than they are worth.
Projects That Increase Your Home’s Value
Many upgrades that are typically worthwhile are relatively simple, functional updates, such as those that increase space, accessibility, and efficiency.
1. Bathroom Remodels
According to Zillow, bathroom remodels consistently offer the most value as far as home renovations go, with an average $1.71 increase in value for every dollar spent. The following are some of the best bathroom renovations for increasing home value:
- Aesthetic updates: e.g. refinishing cabinets, adding a backsplash, updating countertops;
- Accessibility updates: e.g. widening door frames, adding shower seating, installing grab bars;
- Space updates: e.g. adding storage space.
2. Additional Storage
In many ways, the amount of value that you will see from increasing storage space depends on where it is and how it is done. However, this option often offers reasonable value because storage space is a highly functional upgrade that is typically relatively simple to achieve and that may offer associated benefits such as more floor space. Additional storage space may involve anything from new cabinets, closets, and shelving to large-scale alterations like building new garages, or expanding attics and basements. Depending on your location and needs, it may even be helpful to add a small storage building.
3. Attic and Basement Remodels
As mentioned, attic and basement remodels can be beneficial as a way to increase storage space. However, with some simple upgrades such as electrical and plumbing updates (e.g. addition of outlets and lighting, the addition of a small bathroom) these rooms can become far more adaptable in terms of their potential uses. These spaces could be used as an office, a playroom, a mother-in-law suite, and more. This increased adaptability may be appealing to potential buyers who are interested in personalizing their space.
4. Energy-Efficient Lighting Fixtures
Energy-efficient lighting fixtures are a valuable upgrade because they will save homeowners money in the long-run. This is not only an appealing prospect to potential buyers, but may offer you the opportunity to recoup the cost depending on how long you continue to use the space. LEDs and CFLs are typically the most energy-efficient lighting options. Lighting upgrades may also offer benefits in terms of functionality and accessibility.
5. Maintenance Updates
While some aspiring homeowners say they want a “fixer-upper,” they are typically referring to aesthetic and minor structural aspects of the home. Significant issues with functional aspects of the house such as the plumbing can greatly reduce the appeal of the home to prospective home buyers. On the other hand, while it is a good idea to make the house look presentable for sale, you likely will not get a great return on value for repairing every little thing. If your home does need many minor repairs you will want to list the property “as-is.”
6. Curb Appeal Upgrades
According to a study from Michigan State University, landscaping upgrades can increase perceived home value by 5% to 11%. Landscaping and other small touch-ups are typically relatively simple upgrades that increase your home’s value (by up to 7% compared to similar homes), but may also help you sell your house faster, as you will be offering a better first impression. You can also add value to your curb appeal by including functional upgrades such as a carport for auxiliary vehicle storage (boats, RVs, etc.). Such simple structures can be relatively inexpensive to install, even if they are made out of a durable material like metal.
Projects That Aren’t Worth the Cost
Home updates that often don’t pay off are typically expensive, non-functional upgrades with inconsistent appeal to different buyers.
1. Swimming Pools
A swimming pool can add reasonable value to your home, but only under very limited circumstances. For example, the addition of a swimming pool may be worthwhile if the house is located in a very warm climate or a wealthy neighborhood where a pool is expected. However, because swimming pools are incredibly expensive to install and maintain, you should be very sure that you can attract the right buyer if you expect the investment to pay off.
2. Luxury Upgrades
Luxury upgrades typically are not a good investment for home value because they are often expensive and highly personalized to your own preferences. The category of “luxury upgrades” covers a broad range of renovations, from heated floors to wine cellars.
While you may be able to find a buyer who shares these preferences, the lack of universal appeal may make it a tough sell unless you are trying to appeal to a very specific demographic. Luxury upgrades may be a particularly poor investment if they are difficult to adjust or if they completely alter the composition of the space they occupy, e.g. a wine closet with recessed storage space for bottles.
Sunrooms are another spendy update (at an average of $10,000 to $40,000 for a three-season room and $25,000 to $80,000 for a four-season room), and offer varying appeal depending on factors like location and personal preference. A benefit of a sunroom, on the other hand, is that typically it can be used for a variety of purposes, e.g. office, living space, playroom.
4. Porches and Patios
Remodeling Magazine’s 2018 Cost vs. Value report ranked backyard patios as having the worst ROI (47.6%) of the popular renovations they reviewed. If you do choose to add a porch or patio, the investment will likely offer the most value if you choose something simple and inexpensive that can be used for a variety of purposes (allowing future homeowners to personalize as they see fit).