If you want to increase the value of your home, as well as its aesthetic and practical appeal, renovation can help.
Depending on the type of renovation projects you decide to carry out, you could add value to your home in the short-term or the long-term, so you should carefully consider what kind of work you do to your home, and other factors, to ensure that your renovations pay off.
Getting a Good Return on Your Investment
If your number one reason for completing home renovation work is to increase the value of your property and make a profit when you sell, you’ll need to consider various elements.
You not only need to determine what type of renovations would be best to carry out. You also need to consider the current condition of the residential real estate market in the area.
Some types of renovations can add more value than others, and certain renovations in specific neighborhoods can pay off compared to the same renovations in other areas.
Typically, homeowners receive the highest return on investment when they perform renovation work like adding wooden decks, replacing windows, and upgrading bathrooms and kitchens, regardless of the location of a property or the present state of the residential property market.
But the renovation projects that are almost always guaranteed to create a good return on investment are those that fix property design flaws or structural issues.
To maximize your return on investment, you should also consider the tastes of your potential homebuyers.
For example, if prospective purchasers expect a house to come with a swimming pool or an additional bathroom, as other properties in the area commonly have such features, you should consider adding such features to your property in order to get the best return on your investment.
Considering Your Location
Following on from the last point, to ensure your renovations pay off, it’s crucial that you make home improvements that are suitable for your specific type of property and the local area.
It’s not always best to complete home renovation projects that increase the value of your property to a much higher degree than the common cost of other homes in the neighborhood.
Homebuyers look at buying properties in specific areas because they have a good idea of what the average property price is within that location.
So, if you complete renovations that make your property much more valuable than neighboring properties, you could find your house gets much less interest from prospective homebuyers than you think as you’ll be selling above most homebuyers’ price ranges.
Rather than looking at ways to massively increase the value of your home, look at how you can add value via renovation projects that align with the local property market. Often, less is more.
Choosing the Right Funding Option
You not only need to carefully consider the type of renovation work you do, taking the above factors into account. You also need to find the right funding option.
You can then ensure you stay within budget and make a profit from all your hard work.
At the end of the day, it’s as simple as ensuring the costs you spend on your renovations will provide you with a good return on your investment. If you overspend, you might not get back enough to make all your hard work worthwhile.
If you have accumulated a good amount of equity in your home, it’s a good idea to consider taking out a home equity line of credit, such as the HELOC by SoFi. You can then easily fund your home renovations by accessing funds as you require with them.
Considering Long-term and Short-term Appreciation
Most properties appreciate in value over time. And completing renovation work can certainly help your property’s value to increase in the short-term and/or long term.
But some types of home improvements are better for long-term investment while others are better for increasing property value in the short term.
Making design improvements or structural changes is the best way for long-term value increase while home improvements like updating kitchens and adding new air conditioning systems are better for the short term because styles and fashions change over time.
Savannah Dawson is a journalist, equestrian, and fashion lover from Cleveland, Ohio. She studied Journalism News and Information with a focus in Magazine Journalism at Ohio University.
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