Homeownership is one of the most meaningful investments many people make. It can help build long-term financial stability and create opportunities for generational wealth. According to the National Association of Realtors, homeowners who purchased their homes 10 years ago have gained an average of $225,000 in equity nationwide.
If you’re one of the 64% of Americans who own a home, you may be thinking about how to make the most of that investment. In recognition of National Homeownership Month in June, we’re celebrating the value of homeownership and sharing budget-friendly ways to help increase your home’s value.
Cost-effective home upgrades
According to Zillow and HGTV, the following home improvements often provide some of the strongest returns on investment:
Kitchen and bathroom updates
HGTV reports that kitchen and bathroom remodels can recoup more than 100% of their cost. But you don’t have to take on a full renovation to make a noticeable difference. Smaller, less time-intensive updates can still go a long way:
Kitchen
- Add new countertops or a backsplash.
- Coordinate your appliances, such as choosing all stainless steel or all black finishes.
- Paint or refinish cabinets.
- Swap out knobs and drawer pulls.
- Install modern light fixtures.
- Replace the faucet.
Bathrooms
- Coordinate hardware finishes, such as all black or all gold.
- Upgrade the lighting.
- Paint or refinish cabinets.
- Install a new toilet.
- Replace dated mirrors.
- Re-caulk or reglaze the tub.
- Repair or replace damaged countertops.
- Deep clean surfaces to remove stains and rust.
Fresh interior paint
A fresh coat of paint can cover imperfections such as dents, scuffs and small holes while giving your home a cleaner, more updated look at a relatively low cost. Zillow notes that about one-third of sellers repaint their interiors before listing. Depending on the size of your home, interior painting may cost as little as $2,000, according to NerdWallet.
Flooring
If new hardwood floors aren’t in your budget, deep cleaning or refinishing your existing floors may be enough to refresh the space. For scratches, stains or other damage, consider whether a professional repair could restore the flooring instead of replacing it.
Curb appeal
Zillow also notes that about one-quarter of sellers update their landscaping before putting a home on the market. Landscaping can help, but it’s not the only way to improve curb appeal. You can also:
- Replace worn or outdated siding.
- Replace your house numbers.
- Repaint the front door.
- Repaint or power wash the exterior.
- Seal cracks in the garage floor, driveway and walkways.
- Replace the mailbox.
Tech upgrades
Smart technology can also help increase a home’s value. House Digest notes that homes with smart devices may sell for 3% to 5% more than comparable homes without them. Smart thermostats can be an especially practical upgrade because they may reduce heating and cooling costs by about 8%, according to the Environmental Protection Agency’s Energy Star program.
Before you start your home project
Ready to pull out the toolbox? Start by calling your insurance agent. They can help confirm that your home remains properly covered during and after the renovation.
Major renovations can increase your home’s value, which may also increase the cost to rebuild or replace it. Depending on the project, you may need to adjust your coverage limits. For example, if you upgrade from vinyl to aluminum siding, your policy should reflect the higher replacement cost of aluminum. Otherwise, you could find yourself underinsured if the siding is damaged.
If you hire a contractor, ask for a copy of their certificate of insurance. This document shows that their policy is active and provides a summary of their coverage. At minimum, they should carry general liability insurance and workers’ compensation coverage for employees and any subcontractors. Without adequate coverage, you could be responsible for property damage or injuries that occur during the project.
Finally, confirm that your contractor understands local building codes, including any homeowners association requirements if applicable. Contractors should apply for all necessary permits because they are responsible for managing and completing the work. If a contractor asks you to pull the permits, consider it a warning sign that they may be avoiding accountability or operating without the proper license.
With thoughtful planning and smart, affordable updates, you can help boost your home’s value without tearing down walls.
