I'm sure that you've heard that your home can be a great asset. Some people will beg to differ if you have a mortgage, because you don't truly own your home. The bank or your lender does. Your amortization schedule can cause you to pay a ton of interest during the first few years of your loan.
However, you do have some freedom and flexibility when you become a homeowner. If you ever needed to tap the equity of your home, you could get a home equity loan or line of credit.
If you needed to sell your house for a lump sum of cash, you could do that and make a profit so long as the value of your home is more than what you owe the lender.
Home values fluctuate, and it depends heavily on the area and the real estate market at the time. What you may or may not know is that you can actually increase the value of your home by investing in it through home improvement projects.
It may cost money to spruce up your home, but if the value increases as a result, you're just investing your money for future potential gain.
Here are 5 ways to increase the value of your home.
1. Realize the Kitchen is King
As the popular saying goes, the kitchen sells the home. It certainly sold my home. We didn't have to do much in the kitchen at all, and knowing that persuaded us to buy the property. If you can update your kitchen and make it more convenient to use for the next buyer, you can charge more for your home based on that fact.
Stainless steel appliances, an open-concept layout, and quartz counter-tops will all add value to your home.
One thing I'm even thinking about doing is adding a dishwasher to my kitchen, since we don't have one. It may not add a ton of value when the home is appraised, but I know it will appeal to certain buyers. It's one of those small things you don't think about but could make a huge difference.
2. Update Your Bathrooms
Aside from your kitchen, updated bathrooms will increase the value of your home. If you have the space and desire to add a bathroom, this could add $10,000 – $20,000+ to the value of your home.
We have a half bath that was in pretty bad shape when we got the house. The wall was covered in paneling and it was hidden by some hideous cheap wall paper. The vanity was outdated, and the sink was leaking.
Luckily, we were able to do a light remodel for cheap. We put a lot of labor in ourselves. My husband and father-in-law removed the wallpaper and paneling. Luckily, there was drywall underneath. They sanded and smoothed out the drywall before painting it. We bought a new pipe to get rid of the leaking.
We went to Home Depot and got a new vanity and sink top, medicine cabinet and lighting all for under $300.
Buyers looking for a more move-in ready bathroom are willing to pay extra for it, and that's why it's a no-brainer to fix up your bathrooms to increase the value of your home.
3. Install Energy-Efficient Windows
"Energy efficient" is the new buzzword of the decade when it comes to the real estate industry. Most people want to do what they can to help the environment and conserve energy.
Having energy-efficient windows installed will set your home apart from the ones that don't, and in turn drive the value up.
It would also be a good idea to slowly update your entire home to become more energy efficient by doing things like installing a better-quality water heater that conserves energy, along with LED lighting.
4. Finish Your Basement or Attic
A finished basement or attic is a homebuyer's dream come true, and it can add a ton of value to your home while you're still living there. Unfinished basements can often be used as wasted space, even if you're using some of the area for storage, because it's not liveable.
If you're able to finish these spaces, you can potentially add a bedroom, a family room or even a bathroom to the home driving up the value.
You can add custom features to the space or leave it as an open canvas for the next family to use.
5. Have Your Home Inspected
If you had your home inspected when you bought it, odds are the inspector gave you this big long laundry list of items to fix or look into. It's pretty overwhelming but you likely took care of some of the big-ticket items.
Another thing you can do to increase the value of your home is to tackle a project on that list.
You may need to look into the electrical wiring in your home or take care of a roofing project. Start with an urgent item or something that's within your budget.
If it showed up on the inspector's list, it's probably for a good reason and can likely increase the value of your home once taken care of.