Should You Renovate Your Home to Increase Its Value?

As a homeowner, you may wonder if renovating your home is the key to increasing its value, especially if you're thinking about selling or refinancing. While home improvements can boost value, not all renovations are created equal. Whether you’re staying put or planning to sell, it's important to know which upgrades are worth the investment and which might not provide the return you expect. Here’s a breakdown to help you make an informed decision.

Renovations That Can Boost Your Home's Value

Kitchen and Bathroom Upgrades These are the two areas of a home that tend to provide the highest return on investment (ROI). Buyers love updated kitchens with modern appliances, fresh countertops, and new cabinetry. Bathrooms, similarly, benefit from renovations like updated fixtures, new tile, or improved lighting. These upgrades not only improve day-to-day living but also attract potential buyers when it's time to sell.
Curb Appeal Improvements First impressions matter. Small changes like a fresh coat of paint, landscaping improvements, or replacing an old front door can dramatically enhance your home's curb appeal. Even new windows or siding can pay off by giving your house a more polished look, making it more attractive to prospective buyers.
Energy Efficiency Enhancements Adding energy-efficient features like upgraded insulation, energy-efficient windows, or solar panels can reduce your utility costs and appeal to eco-conscious buyers. These upgrades often lead to savings, making your home more marketable while also increasing its value over time.
Adding Living Space Increasing your home’s square footage - whether it's an extra bedroom, a finished basement, or converting an attic into living space - can significantly increase your home's value. More living space is a big draw in any market, especially in growing neighborhoods where space is limited.

Renovations That May Not Pay Off

Overly Personalized Renovations While it's great to customize your home to fit your needs, highly specific or niche upgrades (like a luxury home theater or a built-in aquarium) may not appeal to everyone. Buyers might see them as extra expenses to remove or modify. Keep in mind that the more personal a renovation, the less likely you are to recoup its costs in a sale.
Over-Renovating for the Market One common mistake homeowners make is over-improving their home for the neighborhood. If you invest in high-end features that push your home's price beyond what buyers are willing to pay in your area, you may not get the return you expect. It's important to consider the local market before making any large renovations.
Poorly Executed DIY Projects While DIY projects can be a fun way to save money, poorly executed home improvements can actually hurt your home's value. Buyers will spot shoddy work, and it may raise red flags about the overall condition of the home. If you're not confident in your skills, it's best to hire a professional to ensure quality and avoid any costly mistakes.

So, Is It Worth It?

If you're planning to stay in your home for a while, focus on renovations that enhance your daily living experience and improve your home's functionality. On the other hand, if you're thinking about selling or refinancing, consult with a real estate or mortgage professional to understand which renovations will offer the most value in your specific market. The right upgrades can make your home stand out, but going overboard can lead to diminishing returns.

As always, we at Leverage Lending Group are here to help you navigate the mortgage process and make the best decisions for your financial future. Whether you’re looking to refinance after a renovation or secure a mortgage for a new home, we're just a call away.