Your home may be your biggest investment—especially with recent rises in home prices in Missouri and Arkansas. If you’ve been in your home awhile, just purchased a fixer-upper, or are looking to sell, you might be curious about what renovations could be the most beneficial for your home—both in terms of improving resale value and in improving your daily life.
However, not every improvement is created equal when considering the return on investment (ROI) of money spent, desirability for new buyers, and improvement to your living experience. In this post, we’ll discuss the best home improvements and upgrades that can increase the value of your home, avoid overspending, as well as how to find the most cost-effective methods to foot the bill.
Clean Up the Surfaces: Fresh Paint and New Floors
When you freshen up the surfaces in your home, you can make a big visual impact. Whether you’re looking for an upgrade to enjoy yourself or if you’re planning to sell, these changes can be an inexpensive way to upgrade any part of your home. And they can be all that is needed for simple spaces, like living rooms, family rooms, and bedrooms need.
New paint alone can:
- Make rooms look bigger: Lighten the color or play with different wall colors to change the spatial feel of any space.
- Cover up signs of wear: Dirty walls and chipped paint can make your whole home look old and worn out. Patching imperfections and covering everything in a fresh coat of paint will have an instant impact.
- Modernize the space: Color palette preferences are always changing. Repainting your home with updated color schemes or neutral colors can ensure that your home doesn’t feel left behind.
Floors are another key surface to look at when seeking to improve the cosmetic appearance of your home. And paying a little more for quality products is often worth the extra upfront cost in terms of cost recouped and longevity. In fact, if you plan on reselling your home in the future, consider the benefits of hardwood flooring: 54% of buyers are willing to pay more for hardwood flooring—and younger buyers especially consider it essential.
When updating flooring:
- Choose (neutral) tile over linoleum. And never paint tile.
- Refinish wood floors instead of covering them with new, cheaper products.
- Don’t skimp on the padding when installing carpet—or the carpet, itself.·
Sprinkle Some Flair Throughout Your Home
You don’t need to spend big bucks to make an impact on the feel of your home. Simply introducing pieces of new décor in key living spaces can freshen up the space (but if you’re staging your home for selling, keep décor clean and contemporary to appeal to a broader range of buyers). Incorporating select, high-end touches throughout your home can also significantly boost its appeal to buyers. Use colorful and coordinated accent pieces to set the tone of a space. Updating and improving the lighting can also serve to create a bright and welcoming atmosphere.
As you redecorate, use this time as an opportunity to declutter, making your home look more spacious and organized—always a good look.
Kitchen Updates
Modern, high-end kitchens are beloved by buyers, and can give a huge boost to your quality of life if you plan on staying in your home in the long run. But they can also be expensive—and unfortunately, may not have the greatest return on investment of all home renovation projects.
For a full kitchen remodel, you may expect to pay $45,000—with higher costs for more significant projects. The more you spend, the lower your ROI will be. Minor remodels may recoup 72% of their cost, but major remodels only recoup about 52%.
So how do you ensure the best return on your investment? To get up to a 98.5% return on your dollar, HGTV recommends focusing on simple changes like new paint on walls and cabinets or adding a colorful backsplash, and incorporating stainless steel appliances as older appliances wear out. You can also add functionality with a rolling island and enhance lighting by replacing fluorescent fixtures with recessed and under-counter task lighting.
Bathroom Upgrades
Just like kitchens, older bathrooms with out-of-style fixtures can really date your home, while upgraded bathrooms can drastically increase desirability. And because bathrooms are one of the most used rooms in your home, wear and tear can mount more quickly than in less-frequented or larger spaces. That’s why bathroom upgrades can be a key strategy for getting top dollar for your home.
But also like kitchen remodels, your ROI on bathroom remodels—especially high-end ones—isn’t as high as other areas of your home. A midrange project will have about a 60% return on investment, while an upscale remodel will only earn you about 50 cents back on the dollar.
However, smart changes can make a big difference, without spending a ton out-of-pocket. Because bathroom counters are smaller, incorporating granite or marble in this space can be more cost-effective than a kitchen, and still have a big impact. To save costs, keep fixtures in the same places, if possible, so plumbing doesn’t need to be moved. And upgrading from vinyl flooring and fiberglass walls to real tile can make a big impact—and doesn’t have to be cost-prohibitive. Lastly, don’t forget the impact of good lighting!
New Additions
When you love your home but need more space—or simply love your current interest rate!—an addition can be an effective way to improve your living situation.
Cost of additions vary widely based on the scale of the project, type of project (bathrooms and kitchens with lots of mechanicals will cost more), and location. Angie’s List estimates a range of $22,115 to $81,994 for normal projects.
Before you dive in, get several estimates from builders for your plans, then weigh your options with your lender and an experienced realtor to see if they make sense, are affordable, and the most cost-effective solution.
Go Green with Energy Efficiency
Making energy efficient home improvements is not only an effective way to increase your home value, it will also decrease your out-of-pocket living expenses and make your home more comfortable and modern—a winning combination. According to the National Association of Realtors, homebuyers value the following improvements the most (in order):
- Heat and cooling systems
- Windows, doors, and siding installations
- Energy-efficient lighting
- Energy-efficient appliances
- Landscaping for energy conservation
- Solar panels installed on home
To add to the perks of going green, there are also numerous government incentives and tax credits available to help fund your endeavor. These include:
- Energy Efficient Home Improvement Federal Tax Credits: The IRS offers tax credits for energy-efficient upgrades like doors, windows, roofs, insulation, heating and cooling systems, water heaters, and biomass stoves.
- Inflation Reduction Act: The IRA extends the above existing energy efficient federal tax credits, increases the amount individuals can claim, and raises lifetime limits on credits.
- High-Efficiency Electric Home Rebate Act (HEEHRA): According to Rewiring America, HEEHRA will soon cover 50-100% of electrification costs for low and moderate-income households, including heat pumps, electric stoves, and insulation.
- State Rebates: Local governments also provide incentives for their residents. Here are some possible options to explore in Arkansas and Missouri.
Smart Features
Hand-in-hand with energy efficient upgrades, implementing smart features into your home can help bring any property into the 21st century—no matter its age.
- Smart Thermostats: Optimize energy use and save on utility bills. And sometimes, utility companies will even cover the cost!
- Smart Lighting: Control lighting remotely and set schedules for added energy efficiency.
- Smart Security Systems: Enhance home security with cameras, doorbells, and motion sensors, so your home is secure—even when you’re away.
- Smart Locks: Smart locks can increase convenience and security, wowing potential buyers.
- Smart Appliances: Wi-Fi connected devices, like these recommended by PC Mag, can make everyday tasks simple and convenient.
- Smart Irrigation Systems: Looking to conserve water and reduce time spent watering? Smart irrigation systems can help you do both.
Add Curb Appeal
The exterior of your home is the first thing potential buyers see. That’s why boosting curb appeal is essential for making good impressions, and setting the tone for the whole home viewing experience. And even if you don’t plan on selling immediately, improving your home’s façade can inspire other homeowners to do the same, improving property values in the whole neighborhood. As PlannersWeb writes, “The revitalization of a neglected [...] residential neighborhood often begins with improvements to a single building…”
Simple improvements can include:
- Repainting the front door and mailbox
- Power washing the exterior and sidewalks
- Adding fencing for improved charm and functionality
- Cleaning up landscaping and freshly mulching garden beds
- Adding a decorative planter by the door
- Recoating the driveway
- Replacing outdated lighting
In addition to the front of your home, consider how to make your backyard an asset. Adding a deck can expand your living space, and offers a 50% return on investment. Tidy up the space and keep it tidy if you plan on selling—and don’t forget places like sheds and storage in the process!
Keep Up with Maintenance and Repairs
Keeping your home in good repair won’t increase your home’s value, but failing to do so will certainly decrease it. When you don’t keep up with regular maintenance and repairs, this can lead to more costly repairs down the line—especially when it comes to water damage.
Ensure gutters are clean and effectively channeling water away from your house. Fix any leaks in plumbing or your roof immediately. Strive to keep your basement dry—and consider installing a French drain, dehumidifier, or sump pump to assist in this. And fix any damage to exterior walls as soon as possible. Freezing conditions can exacerbate water damage, so take the time each fall to effectively winterize your home.
Beyond keeping your home watertight, strive to keep all elements of your home in good, working order. As we write in our post, 8 Expenses for New Homeowners to Prepare for, major areas of your home that require the most important upkeep and repairs include heating and cooling systems, landscaping, appliances, windows, driveways, and exterior paint.
Paying For Home Upgrades
Home improvements can be pricey. Adding interest charges can only add to the overall expense. But delaying repairs or skipping the upgrades when you’re trying to sell can end up costing you more in the long run in additional damages or lost opportunities. So, what is the best way to pay for home upgrades? Let’s explore a few options.
Saving for a planned project may be the most cost-effective option, if you have the time. Savings Accounts, Money Market Accounts, and Certificates of Deposit can be excellent vehicles for saving, depending on your purpose and time frame. Not only do they help you set money aside, earned interest can boost your savings. Even if you don’t have a planned use, it’s always crucial to have an emergency fund set aside for unexpected expenses.
While financing improvements may cost more than paying in cash, when time is of the essence, it can be the most cost-effective solution. Fortunately, there are so many options available it is easy to find one tailored to your needs. These include:
- Home Equity Loans/Line of Credits: Leverage the equity in your home to help snag an affordable interest rate.
- Mortgage Refinance: A cash-out refinance can help improve your mortgage terms and provide a much-needed influx of cash for improvements.
- Personal Loans: For smaller projects where you don’t want to take out a major home loan, a personal loan may fit the bill.
- Credit Cards: Ideal for appliance purchases, furnishings, and small DIY projects and their expenses. Limit credit card use to ensure that balances can be paid off quickly (ideally within the month) to avoid high interest charges or an impact to your credit score.
For more information about paying for your next project, check out our recent post, Getting Your House in Order: How to Pay for Renovations.
Upgrade Your Home with CS Home Mortgage
When you’re ready to take on a major project with your home, know the CS Home Mortgage is here to help. We’ll work with you one-on-one to understand your project goals, your budget, and your financial needs, matching you with the right loan product to help you achieve your plans.
Talk to an experienced CS Home Mortgage Lender or visit a convenient location in Northwest Arkansas or Southwest Missouri to learn more about our full range of home equity lines of credit and mortgage refinance options.