Are you thinking about selling your home in the not too distant future? Then you may be considering how to increase the asking price. There are certain home improvements that you can finance that may be good investments, if they are done properly and affordably. The key is to do them 'properly and affordably!' And remember, not every home improvement is going to add value, so spend your money wisely. Let's take a look at five of them:
#1 Kitchen Remodel
Most people center their lives around the kitchen, so many major remodels of the kitchen will pay off at the closing table. You can expect to recoup at least 60% of your money in a kitchen upgrade, and you might even get over 100% back if you really do it right. The big thing to remember is to not go too far; if your kitchen is twice as costly as anyone else's in the area, you won't get your money back.
For example, some people may have an older home out of the 1950s and decide to spend $50,000 to upgrade the kitchen. The kitchen is great but if the kitchen is much nicer than the rest of the house, it actually may turn off potential buyers. People want a 'nice' kitchen, but a deluxe, super expensive kitchen out of step with the rest of the home and the neighborhood may not be worth it. The best way to spend your money is to invest in new appliances, and keep color schemes and paint at top of mind. That's right: A nice coat of paint can do a lot to make the kitchen look much nicer. And make those appliances energy efficient, because people want to look for ways to save money when buying a new home.
#2 Add a Bathroom
If you add a bathroom, you can often get back more than 80% of the money spent. Of course, you need to find the space in your house for another bathroom. Consider any underused closet as a potential ½ bath. Generally, you require at least 18 square feet for a small bathroom. If a full bath is what you want, be on the lookout for an extra 30 square feet. How much you spend on a bathroom is really up to you. If you shop wisely, you can get inexpensive sinks, toilets and shower stalls at Lowe's and Home Depot. A Habitat for Humanity ReStore also has good prices on these and other bathroom items.
#3 Install Energy Efficient Windows
Buyers are looking for energy efficiency these days. Single pane windows are a big turn off. Energy Star states that putting in Energy Star rated windows may save you as much as $500 per year in heating and cooling costs. You can expect to get back about 75% of what you spend on new, energy efficient windows. Also, note that you can get a green energy tax credit of 10% for the upgrade if you are putting in Energy Star rated windows. You might even qualify for more tax credits from your electric company or your state government. You may spend anywhere from $7500 to $10,000 or more to replace your windows.
#4 Add a Deck
Adding outdoor living spaces to the home is very desirable, especially in the South with its mild winters. This type of home addition became even more popular after the last economic downturn as more people stayed home instead of going on vacation. It is estimated that this type of home improvement will recoup as much as 90% when you sell. Of course, the cost of the deck will vary widely. You can spend $1500 or $15,000.
#5 Add Energy Efficient Insulation and Caulking
This is one of those improvements that almost anyone can and should do, especially if you are in an older home. Insulation does not cost a great deal, and it is something that many people can do themselves. If you have an older home and have not done this type of energy upgrade, it will make its way into the home inspector report for potential buyers. Adding more insulation to your attic might cost you $300. And, sealing cracks around your doors and windows can save you hundreds per year in energy costs.
Tip: If you buy a thermal leak detector for $50, you can find temperature differences easily around the home. When you find one, you can then add caulk or insulation in a place where it can make a big difference.
Many home improvements are very much worth doing to increase the value of your home. Plan your home upgrades affordably and you can definitely make a nice profit when you sell the home. Also, you will be able to get much more enjoyment out of the home for years to come.