Which Home Improvements Add the Most Value?

If you’re thinking about selling your home, making some strategic improvements first could enhance its appeal to potential buyers. Many projects will have the potential to “pay for themselves” and then some by boosting the sale price of your home. Read on for advice on smart home improvement investments that match a wide variety of budgets.

Projects That Cost $5,000 or Less

When considering possible presale home improvements, begin by addressing issues that affect the house’s safety or structural integrity. These might include repairing a leaky roof, fixing a chimney that doesn’t vent smoke properly, or having mold removed. You might not consider these enhancements to the property, but left unaddressed, they will be considered material defects that will likely reduce the price you can get for your home.

If there are no “must-do” repairs, you can set goals based on your budget and their potential return on investment (ROI). Here are some projects with the greatest ROI:

• Yard cleanup: Curb appeal—the first impression your home makes when viewed from the street—can be critical to attracting buyers. Replacing overgrown or unattractive shrubs, trimming or removing problematic trees, and refreshing plantings and flowerbeds can do wonders to make your home look more inviting.
• Exterior touch-up: This also contributes to curb appeal. Repaint doors and garage doors, the trim around them, porch railings, shutters, and other building accents. Replace damaged or out-of-date light fixtures, door hardware, mailboxes, and the like. If your house has metal or vinyl siding, have it power-washed.
• Thorough cleaning: Consider using a home-detailing company to clean your home’s interior from top to bottom, shampooing rugs and carpets, scrubbing walls, and scouring sinks, bathroom fixtures, and kitchen surfaces. You may be amazed at how much it brightens up the place.
• Appliance upgrade: A full kitchen makeover is well beyond a $5,000 budget, but replacing an aging stove, refrigerator, dishwasher, washer, and/or dryer can give your home a more contemporary feel and make it more user-friendly.
• Lighting overhaul: If your home has dated light fixtures, replace them with clean, modern designs. Get rid of fluorescent lamps and update all fixtures with LED bulbs, replacing incompatible dimmers or switches as needed.
• Smart-home features: Installing smart thermostats, doorbell cameras, and lighting controls could add appeal for younger buyers (and tech-savvy older ones too).

Projects That Cost $10,000 or Less

• Interior painting: Repainting the home’s interior can provide a sense of newness to a house of any age, especially if you replace dated wallpaper or faddish color schemes with warm, neutral shades.
• Cabinet facelift: Refacing or replacing kitchen and bathroom cabinet doors and hardware can go a long way toward updating an older home.
• Ceiling makeover: Replace popcorn ceilings or tired-looking drop ceilings with more up-to-date styles, incorporating enhanced lighting as appropriate.
• Carpeting and flooring: Get rid of old, stained, or worn wall-to-wall carpeting and replace it with new, neutral-colored carpeting or, if appropriate, replace it with hardwood or bamboo flooring.

Projects That Cost $15,000 or Less

• Exterior makeover: Giving your house a facelift in the form of new siding or a full exterior paint job can greatly enhance appeal to potential buyers.
• Open up a room: Removing all or part of a wall to open up space inside your house may be less of an ordeal than you’d imagine, and the results can transform older homes into more modern spaces.
• Add or enhance insulation: Energy efficiency and HVAC cost savings are priorities for many homebuyers, and if your house “leaks” heat or air conditioning, you can enhance its value with better insulation.
• New windows: Updating windows can also improve your home’s energy efficiency and, depending on what you’re replacing, can also provide a cleaner look and make maintenance easier.

How to Pay for Presale Home Improvements

The most straightforward approach to funding home improvements is to use savings, but if you don’t have sufficient funds at the ready, there are multiple financing options to explore. Borrowing money comes at a cost, of course, so be sure to factor any financing charges—interest and fees—into your ROI calculations. Here are some financing options to consider:

• Home equity loan: A home equity loan uses the portion of your home that you own outright (your equity) as collateral, and typically allows you to borrow a lump sum equal to as much as 85% of the difference between your home’s market value and the outstanding balance on your mortgage.
• Home Equity Line of Credit (HELOC): A HELOC allows you to use up to 85% of your home equity as a borrowing limit, against which you can make charges and interest-only payments for the duration of a specified draw period (typically 10 years).
• Personal loan: Most personal loans are unsecured loans—ones that don’t require you to put up your home or any other asset as collateral. Funds you borrow are issued in a lump sum, which you agree to pay back in monthly installments over a set repayment term that can range from one to six years or longer.
• Credit cards: Interest rates on credit cards are steep and have been getting steeper in recent months, but it may be possible to use a credit card for interest-free financing on a home repair project.

The Bottom Line

Making home improvements before you sell your house can greatly influence its appeal to potential buyers, and in the sale price you can get. These projects all have potentially high ROI, but when deciding which to pursue, it may be worth consulting the real estate agent you plan to handle the home sale. They may have valuable input on what will be most effective for your property in the current real estate market.

If you plan to finance your project with a loan or a new credit card, or if you plan to seek another mortgage after you sell your home, review your credit report and check your FICO® Score for free from Experian to know where you stand before you apply for credit.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is ready to help you navigate the best options for financing your home improvements and maximizing your home’s value.