Home Improvement: Here is what you need to know.
Home renovation plans are hot right now, with plenty of homeowners itching to do something around the house. At the same time, a new sense of workplace flexibility is freeing up another set of homeowners previously bound by their commuter distance to the office.
Add in this season’s tax returns, recent federal stimulus checks, economic side-hustles, and regular pay stubs, and it all leads to unprecedented levels of spending plans for improving a family’s most valued asset.
However, before you start choosing tile patterns and paint samples, Deere Employees Credit Union has one important question for homeowners to consider. Is the planned home renovation intended to help sell your house soon at a higher price, or is this a project meant to enlarge your square footage and accommodate your family in the same home for the continued future?
Best Value Home Improvements for Sellers
If you are motivated to fix up your house and sell it, then it’s important to remember what the experts at Remodeling Magazine say in their annual Cost vs. Value Report on the state of remodeling and material trends in the industry. They say all homeowners should know before they start that most home improvement projects only ever earn back two-thirds of what gets put into them.
Swimming pools, full kitchen remodels and extensive professional landscaping all look nice and cost a lot of money, but your resale value more closely depends on if the house is livable, not the cost of last year’s boiler replacement. In fact, the prospect of endless pool maintenance can even discourage potential buyers, no matter how nice the water looks.
Buyers expect functional items in a house to function, and it’s unreasonable for sellers to expect an increase in value because of regular maintenance. If you think that’s unfair, just remember that regular upkeep and maintenance is everybody’s equal share in the cost of doing business. You are supposed to spend money on your house to prevent it from falling into disrepair and losing value.
On the plus side, there are a few projects sure to earn their money back.
Professional realtors regularly demonstrate that the replacement of vinyl siding with stone veneer accents can earn back more than 90% of the investment during resale. Exterior accents add drama and flair to a home, while interior stairways, doorways and fireplace walls all stand out with a grounded sensibility and earthy feeling that resonates throughout the living space.
One more sure-fire tip for sellers is to add a wooden deck in the backyard, with realtors stressing the value it adds to the bottom line as well as the attractiveness of the home.
Finally, small, strategic renovations like a new steel entry door, dual-pane windows and a brand new remote control garage door all act in concert to reassure buyers that quality is inherent and no details have been overlooked.
There are unseen fixes that cost less than full renovations and earn their worth as basic improvements to the structure of your house. These are the ‘invisible improvements’ that homeowners tend to do regularly and often in unplanned bursts of activity, say, after a sales event at a home improvement store or when seasons change.
However, upgrading your utilities, installing a new HVAC, and replacing a roof past its average life expectancy of 30 years are examples of ‘invisible improvements’ that maintain the value of a home, but don’t necessarily raise it. That is not to say a return on investment is impossible from these renovations. Rather, these improvements float along in the background and help to keep a house livable and its price current.
Some other unseen fixes that help keep a home cozy include replacing outdated appliances, refacing cabinets, and adding new hardware, updating a laminate countertop and sink, as well as replacing the flooring. None of these are capital renovations or full remodels, and even if taken together would cost much less than larger projects and, more importantly, wrap up sooner.
Best Value Improvements for Continued Inhabitation
People, families, and homes all grow. Your two-bedroom, one-bathroom starter home might feel fine for a small family with young children, but as time goes on those kids will more than quadruple in size, and soon need as much breathing space as the parents do. One solution is to sell everything and move to a bigger house. Another fix is to put money into your home and make it bigger.
Improvements that add square footage to your home are best viewed as an investment in your family’s comfort. Remodeling unused areas like your attic or basement into living space goes a long way to create extra bedrooms, bathrooms, family rooms and even storage for everyone’s stuff. The return on investment is measured in peace of mind and happiness.
Likewise, spending big to expand and update a family’s kitchen to accommodate more people and activity makes sense for the quality of life it brings where teenagers and Wi-Fi and working from home all collide in conflict every day. A kitchen island with barstool seating, spacious shelves, multiple charging outlets and a deep prep sink serves as a household activity hub that ties the family together.
Big projects that absolutely improve a family’s quality of life also include a backyard patio addition, an upscale master suite renovation or a sunroom. In fact, for people who plan to stay in their homes, the construction of a home office or extra bathroom might just be the smartest choices.
In these types of remodeling projects, the real value is the enjoyment your family gets out of them. If you’re not planning to stay long, you may want to think twice about a kitchen or bathroom remodel.
Universal Paint Upgrade
There is one home improvement project that nearly always improves the value of a home, whether selling or staying. That project is a fresh coat of paint.
Paint makes old surfaces look new, blends and highlights outer walls and trim with the surroundings and brings life and light to darkened interiors. The colors you choose, inside and out, absolutely play a part in the future value of your home. Real estate professionals all swear by it and national home-listing website Zillow even studied home sales in 2018 to determine how paint color influences price, with some surprising results.
Paint is just part of routine maintenance, except it goes above and beyond the routine. The right color can increase or decrease a home’s attractiveness for buyers,and can result in a higher or lower sales price. According to Zillow, a black door raised final home prices 2.9 percent above non-black doors, while brick-red kitchens sent sale prices down more than $2,000.
Home Improvement Loans
Finally, how will you pay for your home renovation? Will you tap into a pile of cash on hand, or will you take a loan to finance the project? Depending on the size, a home improvement loan from DECU can offer flexibility that helps you match the right project with the right materials, and gives you a safety net to accomplish your goals under budget and on time.
Deere Employees Credit Union offers top market rates for add-on mortgages and home equity lines of credit up to 95% of your home’s current value. With our quick and easy process, your remodeling project, kitchen expansion or new roof is just a click away.
Rates vary according to flexible loan term, credit score, debt-to-income ratio, and type of loan. Talk to your DECU representative for more information to help you make your best choice. Or, get the ball rolling with a no-fee application via our Online Loan Center.