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ATLANTA – The Federal Reserve Bank of St. Louis announced last week that the median price of an existing single family home in the US is now $391,000. And most prognosticators, like our Real estate expert John Adams, see no housing crash in sight.
With interest rates on the rise, more and more Americans are opting to stay put and renovate their house instead of moving. But which improvements will actually pay for themselves in increased value? Adams shares the best home projects that may provide the biggest bang for your buck.
Q: John, last time you were here we talked about how we can know what our home is worth. Today, we’re talking about home improvements that can add value to your home. Can we know in advance what projects will pay off and which probably won’t?
A: There are no guarantees, but yes, we know from past experiences which specific projects are most desirable to prospective buyers, and we also know which project can actually cause your home to lose value.
John says you can always start with the really easy projects that will for sure pay you back dollar for dollar, then move on to the more expensive projects.
Every one of these projects, if done properly, should add at least 100% of their cost to the value of your home.
- Paint is cheap and cost-effective. At about $25 for a gallon of paint, you can paint an average room with four walls. And, of course, the range of colors is literally unlimited.
- Deep clean everything from top to bottom, and that includes floor coverings and windows (both inside & out). Use a window cleaning service, so you don’t fall off the ladder!
- Replace your mailbox and house numbers. Plan on $200 for a really nice post and box installed.
MORE INVOLVED PROJECTS:
- Add inside square footage wherever you can do so. Remember that appraisers typically use heated and cooled square footage to finally estimate the value of a house. If you can enclose a 12×12 screen porch with insulated windows and add HVAC, you are theoretically adding upwards of $35,000 to the value of your home. The same goes for adding an upstairs room or rooms from former attic space.
MAJOR MINOR PROJECTS THAT PAY:
- A minor kitchen remodel includes new cabinet fronts, new laminate countertops, new appliances, new sink & fixtures, and luxury vinyl tile flooring. Costs $15k to $20k, and adds more than that to desirability and value of the house.
- A minor bathroom update includes new tub, new tile flooring and tile wall surround, sink vanity and toilet as well as builder grade fixtures. To save money and time, you can reglaze existing tubs and sink if they are in good condition. Baths are notoriously hard to estimate, but plan on $10k to $15k depending on your choices. And this should repay you dollar for dollar in increased home value.
- Landscaping is important because it is the first thing a prospective purchaser sees when they visit your home. And first impressions count! Keeping the shrubs low, the gutters clear of trees, and keeping the lawn green all set a pleasant tone for viewing from the street. Hire a landscape consultant and have the work done professionally for about $5,000.
PROJECTS THAT ADD NO VALUE:
- In-ground swimming pools, elevators, and plywood paneling can actually lower the value of your home. Don’t go there!
With 30 year fixed rate mortgages approaching 7.25%, you may be tempted to just stay in your current house and renovate instead of moving. That’s fine, but you should know that some projects pay for themselves and others don’t. Make your choices count!
Atlanta native John Adams has been a real estate broker and investor in residential real estate for the past four decades, and has seen the market go up and down and back up. He hosts “The Real Estate Coffee Break” every Saturday at 11 a.m. on the at www.RealEstateCoffeeBreak.com.
John believes that, for most Americans, the best investment they will ever make is their own home.