The housing market is a very tricky thing to get figured out. It’s up and down and around and around, and no one can predict what’s going to happen next month, much less next year. Though one principle of the housing market that’s tried and true and always proves out is that homes that have been renovated are worth a lot more than homes that haven’t been.
This is why millions of homeowners are going through home renovations right now, in order to increase the value of their property. Though while it’s easy to see that renovating a home can increase its value, some people still want to know why. What is it, exactly, about renovating a home that’s so appealing to the market and increases the value so much?
5 Ways Renovations Up the Value of Your Home
1: Appraisal Equity
One of the best ways that a renovation can increase the value of the home is by providing more equity. It’s very common for people who own property to cash in on its equity through having it appraised and hopefully increasing the value of that property. A renovation will certainly increase that equity so that the increased value is there for you when it’s needed the most.
2: Monetary Savings
One of the biggest ways that doing home renovations pays off, either for existing owners or new owners who purchase the property, is that monthly expenses are lowered. For instance, when people remodel their homes with low-flow faucets, solar water heaters, energy-efficient appliances, and better insulation, their monthly expenses go way down in terms of how much they’re spending on utility bills. Saving just $200 per month is a savings of $2,400 per year. Over a lifetime spent in the home, this adds up to huge money, and it’s something prospective buyers definitely take notice of.
3: Less Work to Do
When you were buying a home, did you want a fixer-upper or something move-in ready? The bulk of today’s market concerning homebuyers is full of people who want a move-in ready home. Home prices are up in a big way, so people are taking out more expensive mortgages. They cannot swing a mortgage, plus extra thousands of dollars to do the remodeling themselves. Though when you do the remodeling, you can ask for more money and get it, because the homebuyer won’t have to do any of that work.
4: Aesthetic Appeal
Your home in its current state might have some pretty good selling points. It might have great appliances, but are they stainless steel? The tub and shower in the bathroom might be very high-end, and the floors might be nice marble in great shape, but is it glistening white and a current color scheme? Homebuyers are looking for more than quality; they’re after something that pops to their eyes. So it has to be both. They’re looking at homes that are going to require large investments, and so they want to feel as if it’s an aesthetic match for their tastes. Renovations help appeal to more buyers.
5: That “New Car” Smell
The proverbial “new car” smell is one of the best things people enjoy about purchasing a new car because it just gives that scent that it’s something new. Having your home remodeled in certain respects can give this same impression. People are attracted to it a lot more because it looks newer and fresher and appeals to them more. Even if it’s an old home, the right renovations make it feel brand new, and this comes across as very appealing to prospective buyers and can greatly increase what someone is willing to pay in order to live there.
If you’re looking to get the maximum value out of your home, whether to increase its equity or to get more out of a selling price, then renovations are the way to go. While this is a pretty big investment, statistical data shows that it pays off quite well and homeowners end up making back much more than they invest. So for increased value, you should always consider renovating.
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