Investing in Your Home: How to Increase Home Value (2024)

According to a report by HomeAdvisor, the cost to renovate a home in 2023 ranged from $19,476 to $86,538, with the average project totaling around $51,076. At these prices, it only makes sense to optimize your home renovations so they increase the value of your property as much as possible.

Investing wisely in your home can yield a decent payday. When it’s time to cash out through selling or refinancing your home, you’ll reap the benefits of having more equity.

This guide will demonstrate ways to increase your home value through carefully strategized renovations and upgrades.

1) Clean, Declutter, and Organize

One of the most inexpensive yet effective ways to add value to your home is simply cleaning and decluttering it. A clean home shows well and allows would-be buyers to see themselves living in your space.

“As a realtor, the first thing I always tell a seller to do is to simply declutter,” says Sherri Berry, a real estate agent and operations manager at MidSouth Construction. “This is free and will make any home appear larger.”

Putting yourself in the place of a prospective buyer means that a clean, organized home could be highly valued. Because these projects are extremely economical, the return on investment (ROI) can reach upward of 100%.

Here’s a list of projects to consider:

1. Pressure washing: Focus on areas like siding, driveway, or the deck to enhance curb appeal.
2. Window cleaning: Clean windows allow more light into your home and give the impression that it is well-maintained.
3. Garage decluttering: A clean, organized garage looks good and can prepare your family to leave your home with less stress when it’s time to sell.
4. Deep carpet cleaning: A deep carpet cleaning freshens up the look and feel of your home’s interior and may improve indoor air quality.
5. Bathroom grout cleaning and resealing: Cleaning and resealing the grout can also give your bathroom a new look.

Berry notes why these projects are so practical: “We are selling square footage, so it makes the eye think the space is larger by simply decluttering the space.”

2) Add Usable Square Footage

There are many ways to add space to your home, from adding another bathroom or bedroom to turning an area into an entire living space with a separate entrance. Regardless of the path you choose, you should be able to recoup your investment through a higher appraisal value, renting out the extra space for income, or both.

Some examples of high-ROI home renovations to add value to your home might include expanding your kitchen or finishing your basem*nt. Adding a deck, patio, or terrace can be appealing to potential buyers who value al fresco lounging.

3) Make Your Home More Energy-Efficient

Shannon Feick owns a real estate investing firm, ASAP Properties, in Cincinnati, Ohio. He describes his clients’ preferences regarding energy-efficient homes: “Lately, we’ve been meeting more buyers who are very interested in energy-saving upgrades and smart home technology. These systems can reduce utility costs and are very attractive to buyers.”

Purchasing homewares with the Energy Star or the Energy Star Most Efficient label can save money and is better for the environment. These products, which can cover everything from appliances and electronics to doors and windows, are certified by organizations recognized by the U.S. Environmental Protection Agency (EPA) and must pass rigorous testing that proves these products are energy efficient and safe for the environment.

Another feature growing in popularity is solar panels, though it’s best to get a full analysis to ensure that this is the right option based on where you live. Adding insulation to key areas of your home also increases your home’s energy efficiency and saves money on cooling and heating bills.

It’s worth mentioning that many of these energy-efficient upgrades have another benefit: You may be eligible for the Energy Efficient Home Improvement Credit, up to $3,200, for qualified energy-efficient improvements to your home.

4) Upgrade the Kitchen and Bathrooms

According to the 2022 Remodeling Impact Report by the National Association of Realtors (NAR), a bathroom or kitchen remodeling will fetch an estimated cost recovery of 71% and 67%, respectively.

Even a light refreshment like painting cabinets, adding a backsplash, or updating lighting and plumbing fixtures can go a long way. You can also do more extensive or high-end upgrades, including high-quality flooring, stone countertops, cabinets, energy-efficient appliances, and modern fixtures.

5) Enhance Curb Appeal

Boosting your home’s curb appeal can make your property look more attractive and add value.

Here is a list of ideas to consider:

• Landscaping: Ensure your lawn and garden spaces are neat and trimmed.
• Exterior painting: Add a fresh coat of paint to your home to make it look new and inviting.
• Garage door and front door replacement: These improvements offer a 102.7% and 100.9% cost recovery, respectively.
• Outdoor lounging area: Add furnishings, lighting, and decorative elements to an area like a deck, patio, or covered space.

6) Install Smart Home Technology

The rising popularity of the Internet of Things (IoT) now allows homeowners to manage their homes while saving money and enhancing security.

Though there are plenty of smart devices for your home to choose from, deploy the ones that will add the most value for you and prospective buyers. For example, install smart devices that control your thermostat, main water shutoff valve, and electrical devices. Security systems that include cameras and water sensors can also add value to your home.

The Bottom Line

Renovating your living space can feel daunting with many unknowns. You may wonder if you’ll reap the benefits of a more enjoyable space or a decent ROI when it’s time to sell or refinance your home. Though nothing is guaranteed, you can still be strategic about this undertaking by focusing on improvements that increase your home’s appraised value the most.