Getting the most out of your home often requires walking a fine line between creating an environment that reflects your personal preferences and making changes that will retain or improve your home’s resale value. If you are not careful, you can overspend on upgrades that actually decrease your home’s value. But with careful planning, you can enjoy your home and also enjoy a greater return.
From an ROI perspective, the best improvements to make include upgrades to update the look and improve your home’s functionality.
While you should avoid splurging on the most high-end finishes or appliances, quality makeovers to modernize your kitchen and bathrooms generally prove to be smart investments. Opening up spaces to allow for greater flow and livability or converting an existing unused space into an extra bedroom can also raise the value of your home. Investing in curb appeal and landscaping generally gets a solid return as well.
The key is not to go overboard or indulge in specific personal style choices that can’t be easily changed upon resale. Your best bet is to stay within a fairly neutral tone and design in keeping with popular styles.
Maintenance projects, such as roof or garage door replacement, and upgrades to make your home more energy-efficient, such as window replacement, changing out old HVAC systems, or improving insulation, are likely to pay off in the end.
On the other hand, you might never recover the investment you make into some of your favorite home improvement projects.
Creating a backyard oasis that includes upgrades such as a swimming pool, water feature, outdoor kitchen, and elaborate landscaping can bring a lot of joy and might even impress buyers, but it’s not likely to bring the return you want. In fact, it may work against you and make your home hard to sell.
Making major additions, such as a sunroom, master suite, or second story can be a big gamble too. Unless you own a small house in a desirable area, your home’s value may not increase to match the level of your investment.
Creating custom spaces, such as a home office with built-in shelving, converting a small bedroom into a walk-in closet, or converting a garage into a man cave will only appeal to a small pool of buyers and can backfire on you from a value perspective.
Finally, overly stylized decor and high-end finishes can put a real drain on your bank account with ultimately little return. Fancy chandeliers, Carrera marble countertops, and exotic imported materials might look amazing and impress your friends, but you are likely to lose money in the end.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Past performance is not an indication of future results. All investments have risk, and are not guaranteed.