4 Home renovation ideas to boost your property value
By Jillian White
Jillian White, SRA designated Chief Valuation Officer at Better Mortgage with over 15 years experience as an appraiser, discusses smart home renovations to improve the value of your home.
Nearly 65% of homes are more than 25 years old1 – which means many could benefit from some maintenance and upgrades. Whether you plan on selling soon or staying put a while longer, simple renovations could help you improve your home’s value and boost your equity. That said, not all improvements are created equal. Let’s look at some home renovation tips for getting the best return on your investments.
#1: Picture your target buyer
Think about the typical buyer for your home based on things like your neighbourhood and floor plan. Would your place best suit a young professional, a family with kids, a retired couple, or someone else? Consider improvements that will appeal to the most likely buyer (and maybe avoid that custom pool in the shape of your labradoodle).
#2: Think like an appraiser
When you refinance or sell your home, a third-party appraiser will likely be hired to estimate your property’s value. Appraisers will determine the condition and quality of your home’s construction based on specific ratings. If you make adjustments that may bump you up to a higher condition or quality tier, the impact on your home’s value can be substantial. For example, deferred maintenance is typically the biggest factor that will drive down condition ratings. Sometimes, something as minor as adding a fresh coat of paint or refinishing the floors can have a big return on investment. Quality ratings, on the other hand, can be slightly tougher to influence. Higher quality materials like brick, slate, and marble, plus niceties like crown molding and french doors, can do the trick.
#3: Prioritize preventative repairs and needle-moving upgrades
Routine maintenance is not the most exciting place to spend, but doing things like fixing a leaky roof properly can help you avoid costly damage later. If you’re looking to invest in bigger renovations, consider changes that will increase your square footage and/or make your home more marketable to a larger number of buyers, like adding a room or converting a half bath into a full bath. Keep in mind that even small projects like replacing an old toilet or repainting kitchen cabinets can still make your home more attractive to potential buyers.
#4: Consider curb appeal
Most real estate agents will tell you that curb appeal matters a lot to potential buyers. This recent report on the costs vs value of popular remodelling projects reinforces that sentiment. A garage door replacement is the number one remodelling project in terms of recouping costs. Adding stone siding, new entry doors, and wooden decks are also at the top of the list. Basic landscaping can also make a big difference since pruning unwieldy trees or bushes can create a better view of your house and even brighten the inside of your home.
Run the numbers on a cash-out refinanece
If you’re planning on making a larger investment in your home and don’t have the necessary funds, a cash-out refinance may be a good option. Because cash-out refinances typically come with lower interest rates than personal loans, they are often used for renovations. A cash-out refinance basically lets you take cash straight from the equity in your home. Meaning you refinance your current mortgage for more than what you owe and keep the difference in cash. You’ll get a new loan that consists of your previous mortgage balance plus the cash you took out. Home renovations are one of the most common reasons people cash out, especially since those projects can help boost your equity in the long run.