Best Renovations To Increase Your Home’s Value
Renovations big and small have the ability to transform a space from average to extraordinary, increasing our happiness, the value in our home and the overall appeal your space has to guests and potential buyers. When you think of home improvement, what do you think of? A big project such as redoing the kitchen or bathroom? Or something small like adding an accent wall or replacing the outdated light fixtures? Both large and small projects have their benefits when looking to increase the value of your home when you are looking to sell or refinance. What are the best home improvements to make for the biggest bang for your buck?
Top Renovations to Add Value to Your Home
Renovations fall into two categories: real value upgrades and perceived value updates. Real value upgrades impact the appraisal value of your home, whereas perceived value updates only add aesthetic charm to your property, making it more appealing to buyers.
You can leverage each of these renovations to expedite a sale and increase profit, but what you decide to do will depend on your budget and the value they can provide to your property. We spoke with one of our seasoned REALTORS®, Brent, on what he has noticed are the best home improvements he has seen his clients and competitors make when gearing up to sell their homes
Painting is one way to brighten up a home and make it more inviting on the listing and in-person viewing. Painting may not increase your property’s appraised value, but it does add value in the sense that your home feels more welcoming and taken care of than it would without the new paint job.
Despite these benefits, to leverage this advantage, you should stick to neutral tones –– whites and grays. Brent noticed that buyers are more attracted to fresh neutral paint choices when entering a home, often commenting that it makes the space seem more livable. These colours have widespread appeal, while bright colours, even on accent walls, can depreciate the home’s value from a buyer’s perspective as they could be overwhelmed by the number of updates they would have to complete to bring the home up to their standard.
A staple for home renovations, but often overlooked in older homes. A practical space in a home that typically holds tons of potential. With a smaller footprint than other rooms, the costs of renovation can be kept low yet have a big impact.
Some paint, flooring, and new fixtures can transform a bathroom in just a single weekend. Replace the vanity and shower or tub to make it a full makeover. This type of renovation can get a “WOW” reaction from buyers and even better; the sooner you take on this job the longer you get to enjoy your new bathroom!
The big one! It’s not #1 on our list as the cost is usually very high compared to other cost-effective renovations. That said, this is typically the central room of a home and is one of the most likely to “date” a home.
Changing the cabinet hardware and even painting cabinets can be a great start if you’re not ready to commit to a full makeover. Even adding a simple backsplash and updating light fixtures can have a huge impact on the perceived value of your home.
If you’re looking to make the investment, a full remodel including appliances, countertops, and maybe even a change in layout is going to result in the greatest return on investment. However, if your main goal is to increase the value of your home, it is always a good idea to consult a REALTOR® to determine what buyers are looking for in a kitchen renovation before starting.
Another observation is that presenting the outside of your home in a put-together manner is just as important as tidying up the inside. From a digital marketing perspective, exterior shots are the most valuable. They often grab the attention of prospective buyers as they scroll through potential homes. As a result, the exterior of your home can make it stand out online and, naturally, during any in-person viewings.
Thankfully, exterior renovations aren’t too costly compared to the significant impact on attracting buyers. This means making sure your lawn is mowed, your flowers are healthy, and your driveway is well plowed in the winter.
Another item to consider improving would be your garage door. A well-presentable garage door is high on the list when it comes to getting the money you have invested returned. Buyers see the exterior of your garage before seeing the interior of your home. If your garage door is dented or is not working correctly, this can be a very negative first impression of your home.
If your shingles are nearing the end of their life expectancy, investing in asphalt shingles could be an excellent idea. Even if you plan to sell your home in a month or two, ensuring that the roof won’t be leaky in the next few years would be appreciated by would-be buyers.
Shingles are essential; any house will need updated singles or roofing. The more expensive choice would be to replace the roof with metal, which can be very costly. A better investment would be to replace your roof with asphalt shingles that most new owners will be happy with, and they last for about fifteen to twenty years.
When selecting a colour for shingles, choose a neutral colour and go with as many potential house colours as possible in case future owners change the exterior colour of the home after their purchase.
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Upgrades That Might Negatively Affect Your Home’s Value
What some sellers fail to realize is that not every update adds value. Some may detract from the value as they introduce hurdles in the buyer’s mind. This doesn’t necessarily mean you should avoid making your home a place you love, just be aware that not everyone will have the same taste or appreciate the cost of some less impressive updates.
1) Niche Renovations
If you are preparing to sell your home, it’s best to avoid unique updates that require buyers to share similar tastes to your own. For example, when completing the kitchen, a brightly coloured tile –– although it may appeal to your sensibilities –– could be off-putting to the majority of buyers.
Colour is important. Any update that is too colourful or unusual could make it challenging for prospective buyers to envision themselves residing in the home.
Not every buyer wants to deal with the upkeep of a pool, which means if you are adding the seasonal feature to increase the value of your property, the notion could be misguided.
If you know you have plans to sell soon, forgo installing the pool to focus on other real-value upgrades or repairs.
Available Funding for Home Renovations
The idea of doing some pre-sale renovation is excellent from a resale perspective. Yet, when you start calculating the bathroom reno cost, kitchen remodelling cost, and the host of other recommended upgrades, what may seem feasible from a time and investment perspective may not be from a budgeting perspective. That doesn’t mean you can’t upgrade your home as you intended. Instead, it may mean you should reconsider some of the updates to your home so you could benefit from national and provincial grants.
Many federal and provincial grants help homeowners retrofit their ageing homes with energy-efficient materials such as insulated windows, increasing your insulation, adding heat pumps, etc. These updates will significantly increase the value of your home and help modernize the existing structure without directly hitting your wallet.
Grants for Energy-Efficient Retrofits
By adding energy-efficient retrofits to your renovation plans, you could benefit from the Canada Greener Home Grant. The grant gives homeowners access to $5,600 in energy retrofits –– like better insulation –– provided they are approved by the initiative. The process starts with an evaluation where a licensed service organization will determine if your home is eligible and the energy retrofits that would be beneficial. The process can take a few months, which you should factor into your plans to sell.
Keep in mind that today’s buyers are more energy conscious than ever before as the younger generations, millennials, and gen z, are starting to buy their first homes. These younger buyers are looking for energy-efficient items in their potential homes. Heat pumps are very popular with buyers as they aim to offset rising heating costs while being environmentally friendly.
Provincial Forgivable Loans for Disabled Modification
New Brunswick offers forgivable loans for repairs and modifications to eligible households. If you’re looking to update a rental property, or require eligible updates to your own home, you may be eligible for a forgivable loan of up to $10,000 when undertaking disabled modifications.
Adding the Cost of Renovations to Your Mortgage
There are programs such as a “Purchase Plus Improvement” loan. You can speak with your mortgage specialist to see if you and your home qualify for this loan provision. If you do qualify, your financial institution will take a closer look at your home and the improvements you wish to make. If they are satisfied with their finding, they will release those improvement funds to you to be used for repairs and upgrades.
There is also an opportunity to recapture some of the equity you’ve built in your home to help fund such renovations. Again, your best course of action would be to reach out to your mortgage specialist to discuss this option.
The Bottom Line on Home Renovations
While remodelling your home can add to your current enjoyment and use, it can also increase your home’s value now and for years to come. A higher home value means that you will have more equity, thus allowing you to make a more significant purchase for your next home if you choose to do so.
Remember that before you start to head down the road of a major renovation, not all renovations are necessarily good renovations. Always consider current trends, building costs, and what renovations will yield the highest return of your money in the future. Take into close consideration your budget and location as well. A renovation that works in one city area might not work in another.
When in doubt, connect with a local real estate professional to see what they have noticed as trends and what they would recommend for your home in your neighbourhood.
As always, if you have any questions regarding buying or selling a home in the Fredericton area, you can consult with one of our REALTORS® by calling our office at 506-455-1980 or visiting our website; we will be happy to assist you on your homeownership journey.
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