Ways Enhanced Home Improvements Can Add to Your Home Value
By 2029, the U.S. home improvement industry should be worth $615 billion. The question is: how much of that money will be well-spent?
See, the return on investment with home improvements can vary a lot. Some home projects can even decrease your home's value! Beyond the type of project, the ROI will depend on factors such as:
Real estate market trends
Quality of work and materials
Your home's location
Want to ensure your project will add value to your home? Here's all you need to know about enhanced home improvements and how to choose them!
When Do Home Improvements Add Value?
First things first: most home improvements add some value to your home. However, this isn't the same as making a profit on your investment.
There are two ways to look at a project's returns. First, you can consider how it raises the total resale value of your home. This is particularly useful to know if you're looking to sell your home or borrow against it.
You can also look at pure ROI. This calculates how much your home's value will rise as a share of the project's cost. For instance, if a $4,000 patio installation adds $3,500 to your home's value, its ROI will be 88%.
The key thing here is not to confuse your ROI with the amount of increased home value. This is unique to the home improvement industry. In most other sectors, ROI refers to direct profits, not cost recoupment.
Which Home Improvements Are Worth It?
Historically, some home projects have been more valuable than others. Here are some strategic home improvements that tend to be worth the cash.
Kitchen Renovations
As far as modern home improvements go, kitchen renovations have plenty of fans. A minor kitchen remodel (up to $26,000) offers a fairly good return. This usually involves cosmetic changes, such as:
Replacing the flooring
Painting the walls
Investing in new appliances
Changing the cabinets
Bigger renovations are a bit more iffy when it comes to returns, though. The main danger with high-end remodels is over-engineering. If you invest in too many features, only a few buyers will be interested in all of them.
Bathroom Remodels
Much like kitchens, stylish bathrooms will appeal to many buyers. Again, though, it's best to keep the costs low if you want a decent return. Keeping a bathroom clean is far better than investing in a computerized toilet.
One midrange-budget bathroom project that often adds home value is replacing your fixtures. Most bathrooms would benefit from a modern tub or toilet. For more ambitious projects, consider your circumstances.
Exterior Enhancements
For the past 30 years, exterior home improvements have offered excellent ROI. On top of making your home more sellable, improving your curb appeal doesn't tend to cost a lot. Some simple projects that add value include:
Covering the exterior with stone veneer
Investing in vinyl or fiber-cement siding
Replacing a garage door
Repainting the house
Basement Conversions
When it comes to home upgrade ideas, it never hurts to make your basement more habitable. This adds a lot of living space without adding to your home's footprint, which may be a big boost in value.
Even a full basement redo can be worth it, but you have to do it right. For instance, have you considered turning your basement into a home office? With so many people working from home, this project could be a big hit.
Energy Improvements
In recent years, energy improvements have made a big splash. More and more buyers are asking about clean power sources and green features. Plus, energy-efficient upgrades can lower your utility bills.
For example, consider an HVAC conversion. In 2023, this project offered the best ROI (103%) out of all home projects. Plus, the new IRA means you may be eligible for tax credits when buying energy-efficient appliances.
What Improvements May Decrease Value?
One issue with many home improvements is that they're too personalized. As a result, they'll turn off the average buyer.
Why is this the case? Well, many of these remodels are too expensive or inadvertently destroy valuable features. Most buyers want more bedrooms, so removing a bedroom to make another room bigger isn't a great move.
In general, originality isn't always appreciated. If you're planning on selling the home in the future, be careful about what you add. A hyper-personalized style will make it harder for buyers to visualize themselves in the space.
It's also best not to invest in features that require too much maintenance. An in-ground pool may look great, but not everyone is ready to put the effort into keeping it clean and operational.
Here are some other renovations that may decrease your home's value:
Bright paint colors
Luxurious lighting fixtures
High-end kitchens and bathrooms
What Can You Do to Make a Profit?
Home improvement projects are all about research. For best results, only choose projects with a reliable track record of boosting value.
There are a few things to pay attention to here. First, focus on changes that modernize your home, but stay away from the latest trends. This will help ensure you don't bet on the wrong trend and harm your home's value.
Only make improvements that are in character with your home. In the case of exterior renovations, consider your neighbors as well. If every other home has an in-ground pool, an above-ground one may look tacky.
Finally, consider your home's value before making any changes. Your home's worth plays a part in the ROI you'll get on improvements. Don't invest in renovations that will make your home much pricier than your neighbors.
Enhanced Home Improvements Made Easy
With enhanced home improvements, increasing home value isn't always a priority. In general, it's better to think about your own comfort first. That said, the best home projects will allow you to achieve both!
Interested in exterior home improvement services? At Riverview Home Improvements, we specialize in bringing life to any outdoor space! We offer our services to all homeowners within 50 miles of Clinton, IN.
Not sure what your project would cost? Contact us now for a free consultation and a detailed estimate!
