Buying an Austin home is a great feeling; you’ll have a piece of property that’s entirely your own in a city that’s consistently rated as one of the best places to live in the United States. But over time, you’ll likely be interested in making improvements to that property, including major renovations, small repairs, and everything in between.
With so many renovations and upgrades to choose from, how can you be sure which efforts are worth the money?
Determining the Value of a Home Upgrade
We can estimate the value of a home upgrade, potentially, by examining these key variables:
- Initial costs. First, we need to know how much the upgrade costs. Costs vary in every project, but in general, if you can do the upgrade for cheap, it’s probably worth doing. More expensive upgrades, ranging in the tens of thousands of dollars, are instantly more questionable in value.
- Influence on property value. Some upgrades have the potential to directly increase your property’s value. Typically, you won’t be able to increase your home’s sale price to a degree that exceeds your initial spending; for example, if you commit a repair that costs $10,000, you won’t increase the value of your home by $15,000. However, it may be possible to increase your property’s value by $8,000.
- Recurring value. You’ll also want to consider the recurring value of an upgrade. For example, any energy efficiency upgrade you make has the power to reduce the electricity, gas, or water you use on a regular basis, saving you money directly every month during the course of your home ownership.
- Personal appeal. We won’t discuss this variable much in this article because it’s so subjective, but you’ll also want to think about the personal appeal of each upgrade. If you commit this upgrade, how much value will it return to you on a daily basis? Will you be happier with this upgrade in place?
Kitchen renovations tend to be extensive and expensive, but they also tend to return lots of value to the home—in some cases, up to 93 percent of what you spend. That’s because homebuyers love to see modern kitchen appliances and beautiful kitchen counters; the cleaner and more modern it looks, the better. It’s one of the more expensive renovations you can make to a house, usually costing tens of thousands of dollars, but with the promise of a high ROI and the subjective and functional benefits you’ll get in the meantime, it’s often worth it.
Bathroom renovations are very similar. If you need to redo the plumbing or tear up the floors, this upgrade can be both expensive and time consuming. However, a beautiful bathroom can instantly make your home look more welcoming—and sell for a higher price.
Doors and Windows
If your home is more than a decade old, you might think about replacing the doors and windows. Doors and windows are some of the first things noticed by visitors (and prospective buyers), so if they’re clean and in top condition, they’ll make a good impression, increasing the value of your property. Additionally, replacing your windows with energy efficient options can greatly reduce your utility costs throughout your time in the home.
Energy Efficient Appliances
Investing in energy efficient appliances, including a heater, an air conditioner, a refrigerator, and a washer and dryer, can also be a worthwhile investment. Seeing a relatively new appliance in good shape is more appealing to a prospective buyer, and you’ll spend far less money on your utilities in the meantime.
Paint and Superficial Repairs
Paint and superficial repairs are almost always valuable upgrades to make, in part because they’re so inexpensive. You can pick up enough paint to cover your entire house for a few hundred dollars, and it will only take a few days to fully apply. A fresh coat of paint will make your home look newer, and appear more inviting to new people. Superficial repairs, like fixing holes in your drywall, are similarly beneficial.
For similar reasons, almost any investment you make to improve the subjective “curb appeal” of your home will be valuable. These investments include things like power washing your siding, replacing your siding with new installations, making external wall repairs, or even planting and maintaining a garden. None of these improvements is expensive, but all of them can add value to your home.
Garage Installation or Repair
Most homebuyers are interested in having a high-quality garage, with a functional, reliable garage door. If you don’t have a garage, you’ll probably see a near-positive ROI from building one. If you have one that doesn’t leave a good impression, it may be in your best interest to make repairs, or tear it down and rebuild.
Ongoing maintenance costs almost nothing, but it could save you from some major repairs in the future. Simple tasks like replacing the filters in your HVAC unit and cleaning out the gutters can maximize the value of your home.
Reducing the Cost of Home Upgrades
One of the easiest ways to make a home renovation or repair more valuable overall is to reduce what you pay for it. There are several ways to do this, including finding the right contractor, negotiating for a lower price, and finding more cost-efficient development methods. You can also try to commit some of these upgrades yourself—just be extra cautious if you’re working with electricity, plumbing, or other high-risk areas.
There are many valid reasons to upgrade a home. You might be interested in selling your home in the near future. You might be interested in attracting tenants for your rental property. Or you might just be looking to get the most out of your investment. If you want to maximize your chances of making your property profitable, you’ll need the advice of experts to help you do it. Contact Green Residential today for a free consultation, or to learn how we help property owners get the most out of their investments.