- Separate what you need from what you want
- Do your homework on what the market wants
- Budget, budget, budget!
Boost Your Home’s Value with a Little Investment
Nice big tax return this year? Lucky you! If you have a nice, strong savings account, you might want to think about putting some of that tax return into your home.
And no. We’re not talking about installing an in-ground swimming pool or adding a new air hockey table in the basement. Investing in your home is about putting money toward what you need, not what you want. Not everybody likes air hockey, but everybody loves a roof that doesn’t leak!
The first step is getting online and checking out some real estate websites to see what’s hot. Nowadays, smart homes are the hot topic. But unless you’re pulling in buckets of money, stick with these tried and true renovations to add value to your home.
Kitchen is King
While kitchens and bathrooms are often neck-and-neck when it comes to valuable renovations, we’re giving the edge to the kitchen. A kitchen remodel is almost guaranteed to return more than 100% of your investment, no matter how much you put in.
Whatever you do, be sure to focus on the holy trinity: the cooking area, sink and dishwasher. The flow between these three areas must be effortless, so you’re not tripping over barstools and a microwave stand when you’re walking from the stove to the sink to drain your pasta. Once you have the trinity all set, then you can focus on the other goodies.
Basement or Attic
Gotcha! Thought we were going to say bathroom was next, didn’t you?
To be honest, this is more of a case-by-case recommendation, but we wanted to mention it at the top. A lot of people don’t think about using their tax return to finish the basement or the attic because, “It’s just where I store my stuff.” However, to a buyer, a finished basement could be an area to entertain, and a finished attic could be a master suite…especially if your house is on the small side.
Just be sure to hire a contractor who knows his stuff. You’ll need to pull a permit and make sure all of your state’s housing codes are followed; otherwise your investment may not count as “livable space.”
What’s great about renovating a bathroom is that you don’t have to go crazy. Some simple fixes like re-grouting the shower, adding crown moulding, or adding new lighting fixtures can go a long way.
In our opinion, stripping away any wallpaper for a nice paint job and a little detailed touch will be greatly appreciated by the next buyer. As for the hero of the bathroom, unless you’re likely to take a bath, nix the whirlpool tub for a nice floor-to-ceiling, walk-in shower.
And if you only have one bathroom, consider leaving that one as it is and adding a second bathroom in your basement. It will increase the sale price of your home.
Eliminate Paneling and Popcorn Ceilings
Ugh…the 70s are over and done with, and their home décor style is never coming back. Take some emotional satisfaction in ripping out that ugly wood paneling and putting up some drywall.
If you still want a wood look, try using some reclaimed wood. It won’t take much more effort or cash, and it will add some instant value to your home.
Popcorn ceilings…drywall over that stuff. Up-to-date homes get up-to-date values. Definitely a worthwhile investment of your tax return.
Rip up That Carpet
Here’s another thing that will have a buyer singing your praises. Real, hardwood floors in the living room, dining room and even the bedroom are a big deal these days. And don’t try to cheat with that laminate stuff. That might work for a renter moving into his first duplex, but a homebuyer isn’t having any of it.
Again, keep an eye out for reclaimed wood or shopping around at salvage yards. You can usually purchase new oak flooring and even bamboo for relatively inexpensive, and both look really cool with different stains.
Update the Front Yard
The only problem with the other five renovations is that they do nothing to enhance curb appeal. So, if you’re happy with your inside, take care of your outside and freshen up your front yard.
Add some paver walkways or some fresh color to your planters for a neat and tidy look. For a complete overhaul, find a reliable landscape company to help you start from scratch. These renovations will make your home stand out from the rest and will show potential buyers that you take pride in how your home looks.
Pro tip: Get yourself an edger for some nice, clean lines.
Your imagination is limitless, but your funds aren’t. Budget your tax return finances wisely to get the best bang for your buck. The last thing you need is to run out of cash with a project half finished. Make sure you budget the cost of labor and materials down to the dime, and be sure to give yourself a little wiggle room.
*Not intended as accounting or investment advice. Contact your tax preparer for more information.