How To Effectively Increase The Equity Of Your Home

Most homeowners who are putting their home on the market often try to undertake too many renovation projects, hoping to attract buyers. This results in a lot of needless expense. It pays to be strategic about which home projects you invest in. What does and doesn’t add value to a home depends on a simple formula. Projects that work with what you have are a better investment than tearing down walls and starting afresh. Update rooms that are functional and have high traffic and focus on the exteriors of the house. Projects that won’t really make you a profit are those that are too expensive, in rooms that aren’t used daily or have interior design that reflects too personal a taste (not everyone shares your love of flowered wallpaper).

Profitable projects (Do’s):

A kitchen and bath update: Unless your kitchen is very old fashioned and you need to rework the plumbing entirely, there is no need for a complete renovation. However, some considered updates will draw in buyers. You can’t go wrong with new plumbing fixtures, recessed lighting, a trendy countertop and resilient flooring. Install a new tub and toilet in the bath. You can dispense with the tub entirely for a small bathroom and use glass and mirrors to create the illusion of space. Unless you live in a very expensive area, don’t add deluxe kitchen or bath fittings to your home. Always keep renovations on par with the value of your neighborhood.

Replace siding: The exterior of your house gets a facelift with new siding and realtors swear that this is the most profitable renovation you could make. The National Association of Home Builders estimates high returns on the cost of installing vinyl siding and trim (almost 95.5 percent). If you invest in more upscale siding made from fiber-cement boards or polyvinyl chloride (PVC), you can expect to see a whopping 103.6 percent return on your money.

Get your yard in order: Your garden, your stoop and porch and your walkway are all an invitation to enter the house and it is important to make a good first impression. Make sure your landscaping is on par with other houses in the neighborhood and don’t splurge on a special interest you have (like bee-keeping or a mini basketball court). Keep the garden basic but pretty with a trimmed, well maintained lawn, border shrubs and flower beds.

Unprofitable projects (Don’ts):

Turning a porch into a sunroom or screening the porch: This doesn’t add equity to your home. It can’t even be counted in the total square footage of the house since it isn’t heated, insulated or cooled for year-round use.

Converting a second garage into a family room: Never do this because it will be the one reason a two-car household will decline an otherwise tempting offer. If you’ve already converted the garage into another room, make sure you have all your building permits in order and that everything is to code. This will reduce the chances of potential buyers backing out of the deal at the last minute.

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