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By Melissa Green | Citizens Bank Staff
Whether you bought a fixer-upper or you've been in your house for a while and want to make some upgrades, investing in your home is a great way to build equity early. But before you install that in-ground pool, you should think about what improvements will add the most value. Every upgrade isn’t considered equal: The return on investment (ROI) largely depends on your location, cost of materials, and labor. Additionally, you should consider how long you and your family plan to enjoy the upgrades.
Keep reading to learn more about what investments will add the most value to your home.
Similar to dating, first impressions matter when it comes to the value of your home. Your home’s curb appeal should be inviting to prospective buyers. Not many people will pay top dollar for the “ugly house” on the street. The good news is that according to Remodeling Magazine’s 2019 cost vs. value report, a few simple outdoor upgrades top the list for the highest ROI.
Now that you’ve enticed potential buyers to come inside, they’ll be very interested in the kitchen and bathroom(s). Get the most bang for your buck by keeping the upgrades in the mid-level price range. If you want to splurge on a high-end kitchen because it’s worth it to you and your family, go for it — but the ROI probably won’t be as high.
RELATED: How to Cut Bathroom Renovation Costs
No matter what type of climate you live in, an energy-efficient home keeps you comfortable year-round — and saves you money on your utility bills. Additionally, conservation features can have a significant impact on your home’s value; for instance, replacing the windows can give you a 73% return on investment.
New lighting, appliances, and upgrades all have upfront costs that can save you money over time through reduced energy bills. An ENERGY STAR®-certified appliance will use anywhere from 10 to 50% less energy each year.
Adding square footage can have a significant impact on your home’s value, as bigger homes often command higher prices. In addition to adding an extra bathroom or master suite, you can create additional living space by finishing the basement or building a deck. It’s important to be thoughtful when adding square footage to your house; you want the home to be functional with a smart layout.
When you’re ready to think about funding your project, you have multiple options. Using your savings or credit cards for small projects can be a good idea, but when you’re tackling larger projects like a kitchen renovation, you’ll want to make sure you’re being thoughtful about your financial plan.
Every situation is different, so do the math and talk to an experienced financial advisor to find out what’s the best option for your unique situation.
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