How to Increase Your Home’s Value

The value of your home can fluctuate due to various factors, some of which are beyond your influence, such as the condition of your local housing market. However, there are strategic steps you can take to positively impact its value.

Certain home improvements have the potential to substantially increase the value of your property, thereby boosting your equity. While not all upgrades may yield a full return on investment, they undoubtedly enhance the marketability of your home and improve your living experience while you reside there.

Increasing the value of your home can be achieved through various methods. Some are quick do-it-yourself projects, while others involve making significant investments and hiring professionals.

Boosting your home’s value can start with decluttering and cleaning. This is a cost-effective way to enhance its appeal. Professional cleaning services for a four-bedroom house typically range from $200 to $225, as estimated by HomeAdvisor. Alternatively, you can save by tackling the task yourself. Begin by organizing cabinets, closets, and storage spaces, and consider donating or discarding items you no longer need.

Homes are valued based on their livable square footage, making additional space a valuable asset. Adding a bathroom, a great room, or another functional area can increase both utility and value. Additionally, constructing a separate in-law suite can set your home apart in the market, as it’s a feature not commonly found in many homes. Benjamin Ross, a Realtor and real estate investor, emphasizes the significance of such additions for distinguishing your property from others during the selling process.

Improving home energy efficiency can significantly enhance its value. According to Scott Ewald, director of brand and content marketing at Trane, installing a smart thermostat is a practical step in this direction. This upgrade allows homeowners to control their home’s climate remotely, enabling efficient energy management. By integrating with the HVAC system, smart thermostats become a compelling selling point, emphasizing the home’s comfort, functionality, and energy efficiency.

The cost of installing a smart thermostat ranges from $175 to $1,000, with an average of about $350. Despite the initial investment, homeowners can quickly recoup their expenses. A 2024 report by Green Wave Distribution indicates potential energy bill savings of over one-third through measures like insulation, air sealing, and optimized thermostat settings. Combining these initiatives could lead to annual savings of nearly $234.

Additionally, replacing old windows, upgrading to energy-efficient appliances, and enhancing insulation are effective strategies to boost home efficiency and value.

Applying a fresh coat of paint can breathe new life into both interior and exterior spaces.

According to Timothy Wiedman, a personal finance expert and home-flipper, repainting rooms with outdated or unconventional color schemes is a great starting point for revitalizing your home’s appearance. For instance, if your daughter painted her bedroom hot pink a decade ago, it might be time for a change.

The cost of an interior painting project varies widely, ranging from approximately $970 to $3,000, with a national average of $1,988, as reported by HomeAdvisor. Room size plays a significant role in determining the exact budget. Painting a bathroom, typically the smallest room, might cost between $150 and $300, while a 330-square-foot living room could reach up to $2,000. Exterior painting is generally more expensive, with prices ranging from $1,810 to $4,505, with a national average just above $3,000.

For smaller painting tasks like repainting a door or single room, a DIY approach could cost between $200 and $300. However, for larger projects, especially exterior ones, hiring a professional painter may be worthwhile. Professionals benefit from wholesale paint prices, possess expertise in selecting appropriate finishes, and are skilled at navigating ladders safely.

Enhancing your home’s curb appeal can significantly impact its value, from simple tasks like power washing the driveway to maintaining a well-manicured lawn.

According to Joe Raboine, vice president of Design at Oldcastle APG, upgrading your landscape can have a particularly profound effect. Consider options such as installing a new walkway, adding shrubs and planters, applying mulch, or even constructing a new patio or outdoor kitchen to elevate the overall appearance of your property.

When it comes to enhancing curb appeal, updating your front door can have a remarkable effect, notes Wiedman. He shares how he and his wife replaced their old, unattractive door with a solid mahogany one featuring a frosted, oval piece of lead glass, which he stained himself, resulting in a stunning transformation.

Additionally, don’t overlook the importance of garage doors, advises Randy Oliver, president of Hollywood-Crawford Door Company. Given that the front of the home is often the first impression for neighbors and potential buyers, Oliver suggests considering modern glass panel doors or rustic wood doors to significantly enhance the home’s appearance.

These upgrades offer substantial returns on investment, with garage doors yielding nearly 200 percent and steel front doors 188 percent, as reported by trade journal Remodeling by JLC.

Buyers often prioritize the kitchen as the heart of a home. Therefore, if your kitchen appears outdated or lacks functionality due to layout or space constraints, it can influence your home’s perceived value. However, a complete kitchen renovation is a significant investment, and you may not recoup every dollar spent. Yet, midrange upgrades tend to offer a better return on investment than more extravagant renovations.

For instance, a minor kitchen remodel with midrange appliances typically costs around $27,500 but adds approximately $26,400 in value upon resale, according to Remodeling. If overhauling the entire kitchen seems daunting, smaller changes like updating appliances and modernizing cabinet hardware can still make a noticeable difference.

If you’re preparing to sell your home, you might want to consider forgoing cosmetic renovations and opting for professional home staging instead. On average, home staging costs between $800 and $2,800, although the exact price varies depending on your specific requirements and property.

Staging services encompass a wide range of tasks, from decluttering and depersonalizing (such as removing family photos or personalized decor) to renting furniture and repainting walls. Essentially, the more extensive the staging process, the higher the associated costs. Consulting with a real estate agent can help you determine the most effective staging approach to enhance your home’s value.

Boosting the value of your home not only enhances your net worth but also offers several other advantages:

  • Increased profit upon sale: A higher home value means you can command a higher asking price when selling your property.
  • Expanded home equity options: With a higher home value, you have greater equity to borrow against if you need cash.
  • Protection against market fluctuations: A higher home value may provide a buffer against significant downturns in the housing market.
  • Elimination of mortgage insurance: A boosted home value can lead to the elimination of private mortgage insurance premiums by increasing your equity stake.
  • Improved aesthetics and functionality: Upgrades enhance your enjoyment of your home and improve its overall functionality.

Home improvements can be financed through various means. According to the 2024 U.S. Houzz and Home Study, the most common method for funding renovation projects remains cash from savings, utilized 83 percent of the time. Credit cards come next, albeit at a considerable distance, being used 37 percent of the time, followed by secured loans at 14 percent. For larger-scale projects with budgets ranging between $50,000 and $200,000, secured loans such as home equity loans or lines of credit are employed 23 percent of the time.

Personal loans offer the flexibility of borrowing a set amount at a fixed interest rate without requiring collateral such as your home or other property. Many lenders extend personal loans for home improvements up to $35,000 or even more, contingent upon your creditworthiness and other considerations. Opting for a personal loan, especially if you possess good credit, ensures access to competitive rates and swift fund disbursement, making it a straightforward and convenient choice.

Home equity loans and home equity lines of credit (HELOCs) offer lump sum cash disbursements at fixed interest rates and fixed monthly payments, or a revolving balance similar to credit cards, respectively. Both options necessitate using your home as collateral for approval. They typically carry lower interest rates compared to credit cards or personal loans, with potential interest deductibility if funds are used for qualifying home improvements.

These borrowing avenues are well-suited for homeowners with substantial home equity, usually those who have paid down a significant portion of their mortgage and require a substantial sum, typically starting from around $25,000, for their renovation projects.

A 0% APR credit card offers interest-free balances for a predetermined period, typically up to 18 months. However, it’s important to note that if the balance isn’t paid off by the end of this period, the card’s interest rate will revert to a higher variable rate, potentially increasing costs.

This option is suitable for smaller-scale projects that can be repaid within the interest-free timeframe. Additionally, using a credit card can be advantageous if you can pay your contractor directly with it.

A cash-out refinance entails replacing your existing mortgage with a larger one and receiving the difference in cash, which is determined by the amount of equity you have in your home. This process involves extensive paperwork similar to obtaining a mortgage, along with closing costs.

Best suited for substantial projects and homeowners considering refinancing due to lower interest rates, a cash-out refinance is a comprehensive and time-consuming method. It’s ideal for those with significant home equity who are comfortable extending their mortgage term.