Will an Upgrade Increase My Home Value?
It’s a common question but one that can be challenging to answer. Surprisingly, the location of the property can be a major factor in determining if the cost of an upgrade can be recovered when that property is sold. There are a number of websites that provide information on the cost of home improvement projects, the resale value, and the cost that can be recouped. We looked at Remodeling magazine’s 2020 Cost vs. Value Report, which ranked some common upgrades that could add value to your home.
Upgrades That Add Value
Manufactured stone veneer, garage door replacement, and a kitchen remodel were some upgrades that could increase your home’s value according to the Remodeling rankings. Others that appeared to be worth the investment included siding replacement, new windows, and deck additions. Replacing the front door was one of the least expensive upgrades and also ranked high. We noticed some significant differences between regional data and the national averages in Remodeling’s report. Therefore, local data may be more accurate when considering your own upgrade. Plus, the overall condition of your home may influence the value an upgrade can add.
Cyrus Karl with Coldwell Banker Real Estate and Pyvt in the Greater Boston area had the following experience with a homeowner who upgraded their kitchen prior to listing it for sale:
“The renovation cost the homeowner about $50,000. While many potential buyers complimented the updated kitchen, the renovation did not hide the many faults in the home. The home sold below the average price per square foot for the area, even with the updated kitchen.”
Paint as an upgrade was not listed in the report, but it bears mentioning. Paint can transform a room and give life to a drab exterior. And a brightly colored room might benefit from a neutral coat of paint when it comes time to sell. However, painting the inside and outside of your house before it goes on the market may not add the value you think. Most homeowners may want to consult with their real estate agents before moving forward.
Local Real Estate Agents
Real estate professionals can be a valuable source of information when you’re considering upgrades to your home. They are tuned in to the local housing market and often have a network of peers who share data on property sales.
Josh Stech, co-founder and CEO of Sundae, shares the following insight based on his years of experience in the residential housing market:
"Home upgrade values are one of the most common questions I get asked. Unfortunately, there's no simple answer because home upgrades depend on a number of ever-fluctuating factors such as buyer demand, quality of the work and materials, as well as the state of the housing market itself."
Ultimately, whether an upgrade will add value to your home is a question without a definitive answer. It is highly dependent on the location of your property as well as the overall condition of your home. However, there are numerous websites with data that can help you make an informed decision. Plus, local real estate agents can provide expert advice on upgrades that can help sell your home.
Whether you are planning to purchase a new home or considering a refinance, you can find out more about your mortgage options at Axos Bank.
Will an Upgrade Increase My Home Value?
This blog post was published by Axos Bank on January 29, 2021 and last updated on January 29, 2021.
