Many homeowners are unsure of the best way to protect their home’s value to remain competitive in the real estate market. While most homeowners understand the need to keep up with improvements, they want to avoid spending money needlessly on improvements that will give them little or no return on their equity.
Whether buying or selling, it is inevitable that at some point, a real estate appraisal will be done to satisfy the lenders requirements for mortgage approval. As such, it is important to understand what improvements will go the longest way to improving the value of your home. Simply put, you want to know what improvements will give you the biggest bang for your buck.
A good place to start is by accessing a review of The National Association of Realtors, “Remodeling Impact Report”, which lists what specific improvements cost and how much of that cost can be regained when selling. Top suggestions included the following:
- Investing in a new roof if there are signs of wear and tear which can lead to costly leaks and large hits to the monthly heating/cooling bill can provide about a 106% return.
- Refinishing/installing hardwood floors since this remains a consistent “must have” on the list for homeowners of all ages and can provide almost a 100% return.
- Installing a new garage door which can completely change the look of your home given the large array of styles, finishes, and colors available can provide about a 94% return.
- Upgrading current insulation can save on monthly bills while keeping the temperature of the house consistent can provide about an 82% return.
- Putting up vinyl siding which is both fade proof and warrantied for life saves both time and money spent on continuous painting and can provide about a 65% return.
- Installing fiber-cement siding is costly, but it exudes a certain status to buyers and can provide around a 75% return.
- Replacing the HVAC system to a new one improves air quality, is more efficient and economical in the long run, and can provide about an 84% return.
All in all, while ideas of what constitutes quality may differ, the consensus is that quality and serviceability remain an important factor, regardless of whether buyers were new to the home buying market or had prior experience with buying a home.