Most improvements add value to your home. When your house is more attractive or has more features, buyers will pay more for it. However, at the same time, even the most lucrative improvements rarely add enough value to cover their costs. As such, improving your home is a project that you should undertake as much for your own benefit as to build equity.
The best renovations that you can do are the simplest ones. Simple tasks like cleaning up your existing landscaping, pressure washing your home, repainting your front door and fixing a leaky roof can create more value in your home than you spend to complete them. Most of these types of improvements either increase curb value or remove problems that would cause a buyer to significantly discount your house.
A new kitchen can also create significant value in your home. Buyers are attracted to homes with new kitchens, which can increase interest and drive offers up. When you renovate your kitchen, keep in mind that shooting for a renovation that creates an attractive and timeless kitchen will provide a better return than one that uses the most opulent fixtures and features. An appropriate remodel can produce an 81 percent payback, based on data reported by CNBC. Bear in mind, though, that the longer you enjoy your kitchen, the less value it will add to your home. Between the fact that even the most timeless fixtures can become out of date and the fact that your kitchen won't look as new after a few years, your payback will drop.
Bathrooms are not only valuable renovations but can also be done relatively easily by homeowners themselves. Sometimes, doing as little as trading an old-style vanity sink for a newer pedestal sink and installing a new toilet seat can be enough to add value to a house. More extensive renovations should also be worthwhile. A full bathroom remodel could generate a 65-to-75 percent payback, in addition to giving you a nicer bathroom for yourself, reports SmartMoney.com. As with kitchens, bathroom renovations also gradually lose value based on the time difference between when you do the work and when you sell the house.
Create New Space
If you can create new space without negatively affecting the floor plan of your house, you will also add value. Turning a den with a window into a bedroom by adding a closet can be a simple weekend project that opens your house to more buyers. Finishing a basement to add a family room or an attic to add a bedroom can be more extensive but also pays back 75 percent of what you spend on average, based on research reported by SmartMoney.com.
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.