A home is often a person’s most valuable asset. While most homes will increase in value over time, meaning it will likely be sold at a profit, there are things an owner can do to speed up appreciation.
How to Think About Value
While many DIY projects—such as painting the interior walls—have been proven to potentially increase the selling price, projects that require a licensed contractor tend to result in more significant valuation increases. However, not all projects add to a home’s worth; according to Zonda’s 2024 Cost vs Value Report, some, such as remodeling a bathroom or adding a backyard deck, could end up costing much more than they might add to the home’s selling price.
“The key here is to understand there are several reasons to undertake major home improvements,” Mr. Rodriguez said. “One is to get a higher price when it is sold, while another is to make the home more enjoyable for an owner who has no immediate plans to sell it. Too often we’ll see a homeowner who is planning on selling the home add their dream kitchen. But then they discover the features they find highly desirable, such as their personal preferences in granite counters, appliances, custom cabinets, or backsplash tile styles, don’t always match up to what homebuyers are willing to pay more for. I tell my clients to think twice about assuming what a potential homebuyer might find appealing.”
Another reason to make upgrades comes down to practicality—buyers that are willing to pay top dollar want a home that is move-in ready, not one that needs work. He suggests considering if the home’s plumbing or electrical wiring system is in need of repair, or if there are signs of damage to the roof, driveway, or other clearly-visible areas.
When selecting colors for the house as well as the trim, put personal taste aside in favor of colors that increase your home’s curb appeal. (Hill Street Studios/DigitalVision/Getty Images)
Upgrades That Boost Curb Appeal
Mr. Rodriguez works closely with his clients to select upgrades that are more likely to add value to the home. “Based on national averages shown in the Zonda Report,” he said, “upgraded garage doors and steel front doors tend to add almost double their cost to a home’s value. For example, a garage door replacement that might cost, on average, about $4,500, adds about $8,500, while installing a high-security steel front door might cost about $2,300, but adds over $4,400 in value. They also add quite a bit to the home’s curb appeal.”
Curb appeal is what the property looks like from the sidewalk or street. It often includes features like landscaping, exterior paint or finish, the roof, windows, and doors. The sheer size of a garage door can make it one of the first things a prospective buyer sees upon arrival, making it a prime candidate for upgrade if it is in less-than-optimal condition.
Value Isn’t Always Monetary
Sometimes, upgrades that are required in order to make the home more attractive to potential buyers might not add much to the value, such as replacing outdated windows, installing a new roof (in some areas, lenders insist on a home’s roof being less than 10 years old in order to issue a mortgage), or resurfacing the asphalt or concrete driveway if the existing one has cracks, holes, or bare spots. These upgrades probably won’t make a big difference in the selling price, but will make the home more likely to sell at or near full asking price.
Clockwise from left: Accenting a log home with cedar shakes and field stones gives it a warm, rustic look. Buyers will value the fact that it requires minimal maintenance, such as an occasional re-staining or sealing; installing, repairing, or replacing a roof is a proven way to make a home stand out in the marketplace. Buyers will gladly pay more for a home that they know is in top condition and move-in ready; give your home a welcoming feel by painting metal garage doors to make them look like wood. (Andy Holmes/Unsplash; Victor Yarmolyuk/Shutterstock; Kevin Wolf/Unsplash)
It’s always best to make improvements that can be enjoyed if the home doesn’t sell for an extended period of time. An example would be a home theater versus wood flooring that could become quickly scratched by kids or dogs. Impact-resistant windows are another fairly straightforward upgrade to consider in areas prone to windstorms and hurricanes.
Using Market Research to Find the Best ROI
When determining which upgrades might add the most value to your home, it’s crucial to research current market trends. You may find that what works in one geographic area might not apply to others.
Some ways to give your pool area an instant upgrade: a fresh coat of varnish on classic wood pool furniture and power-washing cement and stone features. (Adheesha Paranagama/Unsplash)
The report explains that factors including the home’s location and the type of pool added can impact any possible increase of sales value. The report advises that while adding a pool to homes in California might result in a higher sales price, the same cannot be said for homes in areas where pools are not common. In fact, the report says that while adding a pool to a home in Los Angeles might result in a sales price $95,000 more than a comparable home without a pool, homes in San Diego might only experience an increase of about $20,000 in value. This makes the cost of the new pool a fundamentally critical factor.
Other factors include the type of pool; the report suggests that an in-ground pool adds more value than an above-ground pool. The disparity is driven by the construction costs of each type of pool, the size and design of each pool, and their typical service life. Homeowners also need to factor in potentially high liability insurance costs, as well as maintenance expenses—pools require a lot of attention to look their best.
Choosing a Contractor
It’s best to work with a licensed, insured contractor, even if a homeowner has extensive construction skills. A licensed contractor can make renovations correctly and in sync with local rules and regulations, purchase materials at less-than-retail prices, and provide the homeowner with some recourse if the project goes badly.Carefully vet all contractors under consideration. Review the GC’s website, check their insurance and license status, ask for references, and contact them promptly to ask any relevant questions. Before any work commences, make sure any permits that may be required are in place—and keep in mind that, in some cases, work that falls under the category of a repair may not require a permit.
With the help of market research and a good general contractor, you will be well on your way to a more valuable home. Not only will the upgrades give your home a better selling price for the future, but they can also make it that much more enjoyable for you to live in today.
