Remodeling your home is a great American pastime. It can be great fun conceiving of a project, watching the work unfold and then living in the remodeled home. Perhaps you’re thinking of starting a project on your home. Before you break out your sledgehammer and get to work, you should understand which renovations can make the most difference in the overall value of your home.
Below, we examine a list of the most cost-effective renovations to make to your home, according to a report from the National Association of Realtors (NAR).
Hardwood Floor Refinish
Refinishing your hardwood floors may take a lot of time and manpower, but the results can make a huge difference in the sale of your home. According to the NAR report, refinishing your hardwood floors has a “project recovery value” of 100 percent, meaning that in the study 100 percent of the project costs were recouped when the home was sold. On average, refinishing hardwood floors costs around $2,500, but the monetary and aesthetic results can be well worth it. It also makes the hardwood floors last longer. In fact, 82 percent of respondents said they had a greater desire to spend time inside their home after completing their hardwood floor project. That’s a good indication that this renovation will make buyers more enthusiastic.
Though certainly not the most exciting or aesthetically pleasing home upgrade, making sure that your home is well insulated can significantly affect its value. According to the NAR report this type of home improvement has a 95% project recovery value. An insulation upgrade will make a home more energy efficient and make it a more comfortable living space for the homeowners (meaning it will make it cooler in the summer and warmer in the winter months). Upgrading your insulation may not make your home look prettier, but buyers will think of your home as reliable—and will appreciate that they won’t need to worry about significant energy costs.
New Wood Flooring
If you still have that red Berber carpet from the 90s in your house, you might want to think about upgrading to wood floors. Buyers love wood floors (watch any HGTV show for a few minutes and you’ll likely hear them brag about “all wood floors”) and they make a house look modern, clean, and cozy. Not only do they look great, but they also help homeowners increase the value of their home. Installing new wood floors will likely make your home worth more. The NAR report found that such projects have a project recovery value of about 91%. Though installation of wood floors can cost about $5,500, the investment can pay off.
Basement Conversion to Living Area
All buyers want the maximum amount of living space they can get for their budget. Converting your basement into a living space is a great way to add additional square footage without having to build anything onto the house. Although a traditional basement is great for storage it can often look scary and uninviting to buyers. In addition to having more living space, a potential buyer could see a finished basement as an opportunity to make a guest room, a playroom, or an office that they otherwise wouldn’t have. Basement upgrades can be pricey, with an average project cost of $36,000, but according to the NAR report they have a project recovery value of about 69%.
The kitchen is the heart of the home, and it’s where you and your family probably spend a lot of your time. It’s where you cook every meal and where you’ll enjoy many memorable family celebrations and dinners. Kitchens can definitely sell houses (and vice versa—a kitchen can really turn the buyer off of a house) so making sure that your kitchen is up to date is crucial. A full kitchen renovation can be very expensive, but upgrading things like appliances or replacing the countertops can go a long way toward appealing to buyers. According to the NAR report, a kitchen upgrade has a project recovery value of about 67%. A top-notch kitchen can make a big difference in persuading a buyer to close the deal.
How to Pay for Home Improvements
While making the home improvements above can add significant value to your home and appeal to prospective home buyers, you might feel that the cost is also significant. That’s why you should evaluate all the possible options for paying these expenses, including home equity loans, home improvement loans, or a home ownership investment. With a home ownership investment from a company like Unison, you can get the money you need for home improvements without taking on additional monthly payments.
The Unison HomeOwner program allows homeowners to unlock the equity in their home with a substantial cash payment they can use right now. You can unlock up to $500,000 of home equity. The money can go toward anything you want – including any home improvements or remodeling projects. Because it’s a home ownership investment, not a loan, there are no monthly payments and no interest charges.
How does it work? Unison invests alongside you as a partner. In return for the company’s investment in your home, they receive a portion of the future change in the value of your home. Unison shares both the upside and downside risk with you. When you choose to sell your home, up to 30 years later, if the home value rises, both you and Unison share in the appreciation. If the home value falls, both you and Unison share the loss.
With a home ownership investment, you get the money you need in order to make home improvements that increase the value of your home, without taking out a loan, paying interest or making monthly payments. Learn more here.
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