Your home might be your castle, so it’s also likely your greatest source of wealth. It’s likely the largest, most expensive thing you own — the one tangible possession whose value increases with age.
And with that asset comes a measure of security. Your home’s equity may well pay for your child’s college education, for that trip around the world you and your spouse have always dreamt of, for that early retirement you’ve been longing for.
But building your home’s equity is about much more than seeing to the maintenance and upkeep. If you really want to maximize the value of your home, remodeling and renovation are ideal ways to do it.
The key, however, is to be strategic and discerning in your projects. It’s imperative to understand which upgrades will add value and which, alas, will not. This article shows you how to differentiate between costly pet projects and savvy investments.
Unless you’re planning to put your home on the market very soon and your goal is to prep your digs for a quick sale, chances are building equity isn’t the only reason you’re considering a remodel. You might, for example, be looking to trick out the man cave or install an in-ground pool and transform your backyard into a suburban paradise.
But even if you’re planning to remain in the house for a while, it’s still important to plan your renovation and remodelling projects not only with your own family but also future buyers in mind. That doesn’t mean you have to give up on your dreams of a palatial bedroom suite or a bathroom that would put the most luxurious day spa to shame.
What it does mean, however, is that you have to be clear and objective when balancing costs with (realistic) projected returns, bearing in mind that it is quite possible to “over-renovate,” to make costly upgrades that simply price your home out of the market. Having a clear-eyed view of potential returns-on-investment (ROI) helps you determine whether any potential losses on the financial investment will be worthwhile to you and your family.
Learning to calculate square footage accurately, for example, is a great place to begin when you’re strategizing your next major home project. While purchasing some extra materials is wise in case of errors, you want to make sure you’re not overspending because you’ve calculated your remodel space as much bigger than it really is. After all, as any homeowner knows, even the most meticulously planned projects can quickly spiral into an uncontrollable cash suck.
Taking Care of the Biggies
If your primary goal is to add value to your home, though, then you may be in better luck, because you’re not going to be forced to choose between your heart and your head. In fact, there are specific upgrades that are pretty much guaranteed to add value to your home.
The first order of business is to take care of issues that are going to be a deal breaker when it comes time to sell. So you’ll want to start your remodelling strategy by taking stock of your house as a whole.
The truth is that your house will speak to you if you know how to listen. That means keeping an ear out for some potentially telltale signs: if you hear knocking and banging in your pipes, sounds of running water from unknown sources, electrical humming or buzzing, or strange hissing noises, that can indicate a significant problem that will have to be addressed before any other remodelling project can begin.
That’s because these sounds may indicate problems with your home’s basic infrastructure, from the plumbing and electrical system to the roof, walls, and foundations. And if your home isn’t sound at its core, then no matter how well planned your next reno project may be, you simply could be tossing your money away.
Once you’ve taken care of the biggies, you can turn to those savvy remodels that both your family and your future buyers will love. A great place to begin is with the basement. A basement remodel will make your home more energy-efficient, driving down heating and cooling costs.
Not only that, but a basement remodel is an ideal way to add living space without taking on the often exorbitant costs of adding a room. The same goes for the attic and garage — any time you can add living space to the existing structure without building on, you’ll automatically be adding value.
Keep It Simple
Renovating your home doesn’t have to involve hours of labor and thousands of dollars, however. If you’re looking for some quick and easy upgrades that will add instant value to your home, there are plenty of options. Giving your rooms a fresh coat of paint in neutral colors can quickly transform your interiors and make your home more marketable. Likewise, switching out your tired, worn, and outdated hardware with modern finishes will instantly freshen up your kitchen and bathrooms, which tend to be far and away the costliest remodelling projects.
Remodelling your home to increase its value requires you to strike a fine balance between your heart and your head. Not every remodel or renovation will add value. And that’s why it’s critical to be objective, do your research, and build a strategy that enables you to both create the home of your dreams and grow the nest egg your home provides.
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