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How To Increase Your Home Value

How To Increase Your Home Value

When it comes to increasing your home value some investments have a greater return than others and it is important to understand the difference to maximize your overall return. Common areas for remodeling or renovation are the kitchen, bathroom, painting and new landscaping. With the exception of painting, these are considered major areas of improvement and will often set your home apart from other similar homes on the market.

Home ownership not only has inherent tax benefits as well as providing a place for you and your family live but it is also regarded as a long-term financial investment. As with any investment it needs to be managed to yield the greatest return so being smart about implementing various improvements will either help or hurt this investment. Installing a putting green in the backyard, while fun and appropriate for the current homeowner, is likely to be less appealing to perspective home buyers. Also, using bright bold colors and painting rooms lime green or hot pink also normally result in a negative perception and can actually result in a decrease in home value yielding less money during a sale.

Remodeling and renovations done for the benefit of the homeowner are more likely to be successful as the decision may be more closely scrutinized and budgeted. The common sales pitch by many companies is to install aluminum siding or upgrade the roof to clay tiles replacing the existing shingles but there is normally very little reason to implement these renovations. Determining your home's value is more than simply multiplying square footage times the average market price per square foot. Numerous factors such as other homes available on the market, location relative to points of interest and existing upgrades such as cabinets and flooring help in determining a home's value. If upgrading shingles to tile roofing cost $15,000 but your home is already at the high end of the current market price range then this would be considered an unnecessary and expensive upgrade. If a homeowner implements to many upgrades to an existing structure in a lower middle income neighborhood it very well could price itself out of the market simply trying to recoup costs.

Installing a swimming pool or hot tub can be an expensive endeavor but if you plan on staying in the house for 5 to 10 years then this would be a worthwhile addition. The key is for the homeowner to benefit from the upgrade personally and receive years of enjoyment regardless of whether or not they recoup the cost when the home is sold. Likewise for adding additional rooms onto the existing structure. If the addition is to be used for growing a family or a home-based business then the addition may very well prove beneficial during a sale but more importantly it will serve a function and benefit the homeowner for a period of time.

There have been many studies and analysis to determine which remodeling or renovation ideas will recoup the most initial investment. One of the most successful remodeling efforts is upgrading the kitchen which can often return is much is 95% of the initial investment costs when selling a home. Kitchen remodeling however can cost anywhere from $10,000 - $20,000 and should not be done strictly for sale purposes. Landscaping on the other hand has an almost identical return of investment, usually around 85%, but is much more cost effective and can normally be done for a few thousand dollars. Laying fresh sod or planting bushes and flowers is inexpensive and immediately sets the home apart from its neighbors. Some other upgrades include adding a room onto a structure which can yield 85% or replacing a roof which can return almost 90%. Less effective upgrades tend to be adding a swimming pool or a fireplace which have a return on investment of roughly 50%.

There many ways to increase home value but some remodeling or renovations are better than others. The differentiating factor is whether or not the upgrade is for the homeowners benefit or to increase resale value. If it is for your benefit then shop around to get competitive quotes and make sure to enjoy the upgrade for many years. If the upgrade is strictly for increasing resale value then it would be best to speak with a realtor and get ideas for spending as little money as possible while presenting the home and best light.