Home Improvements that Pay Off

Investing in Your Own Home

Home Improvements that Pay Off
March 7, 2014

Are you starting home improvement projects to celebrate spring – or to recover from this year's wicked heating bill? Are you looking to sell your home soon, and investigating home improvements to improve the sale price? In any case, you want your home upgrades to result in savings and/or increased value. But which improvements are most likely to do so?

To answer this question, let's first consider improvements that help resale value while providing immediate savings.

  • Programmable Thermostat – Programmable thermostats are cheap, easy to install, and quickly recoup their cost. Today's versions are quite sophisticated; some can even adjust the heat through "learning" your schedule. Even a rudimentary model will save significant money.

  • Efficient Lighting – High-efficiency LED bulbs are coming down in price, and they will almost never need replacement. You're going to have to say goodbye to incandescent lights soon anyway; you might as well start now.

  • Insulation – Check the insulation in your attic, and on your ductwork. Fill in any gaps or thin spots. If you don't have insulated ducts, it's worth insulating them to avoid heating/cooling losses as the air ducts pass through open crawlspaces or attics.

  • Energy-Efficient Windows – The newer generations of windows are very energy efficient and aesthetically appealing. New windows are also high on the list of resale return on investment.

  • Tankless Water Heaters or On-Demand Systems – There are several methods available to provide on-demand hot water, reducing or eliminating the need to heat water when you aren't using it. These are easy to install in new homes but tricky to retrofit.

Before considering cosmetic projects for resale improvement, it's important to make sure the basics are in good shape. A leaky or questionable roof, foundation cracks, bad gutters, poor drainage, moldy or musty basement, water leaks, drywall cracks, defective flooring – things of this nature must be addressed first. If potential buyers expect to pour a lot of maintenance money into your house, they will give you a lowball offer or reject your house altogether.

Assuming basics have been taken care of, these projects have a generally high return toward resale value:

  • Landscaping – You don't need fancy landscaping, but if your house has poor curb appeal, buyers will never go inside. A little grass seed and some TLC, or creative use of mulch and plantings, can go a long way.

  • Exterior Work – Give your house a fresh coat of paint, clean the bricks… in general, do the simple things. If you have siding, consider upgrading to the newer generations of high-end siding, as it often pays off in appearance and low maintenance.

  • Bathrooms and Kitchens – These two rooms consistently provide high return on investment, as long as you don't overdo it. A simple renovation for resale can pay off well. In the case of a bathroom, consider an addition as well as a renovation. For kitchens, any regular viewer of HGTV can tell you that buyers put disproportionate value on the appliances. Modern stainless steel appliances, granite countertops, and new or refurbished cabinetry often seal the deal.

  • Paint – A simple coat of paint in neutral colors is very inexpensive and has a positive effect on homebuyers far beyond its cost.

It's hard to evaluate your own house objectively. If you aren't sure how your house stacks up, have it evaluated by a real estate agent for the best way to improve value in your situation.

Prioritize your projects by the greatest payoff (basics first), and then it's off to the hardware store with confidence. Soon you will be enjoying savings and increased home value, as well as the satisfaction of a job well done.

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