Home Ownership

Get the best return on your home improvement investment

Two friends completing a home improvement project trying to get the best return on their investment.

If you’re planning to sell your home, the improvement and repair projects you choose should boost resale value and help your home stand out from others on the market without over-improving it compared to your neighborhood.

Here is a guide to the costs and benefits of home improvement projects to help you make investment decisions that offer the best return.

Home improvement project blueprint: Where to start

Before knocking down walls and making major changes, consider these guidelines:

Neighborhood

If you are adding a second-story in a neighborhood of bungalows or ranch-style homes, your return may not be as high as you thought because the changes may not fit in your neighborhood.

Age of home

If you have a home built before the 1980s and you remodel the kitchen and bathrooms, you may get a better return than if you remodeled these in a home that is only a decade old.

Appropriate upgrades

Adding a modernist kitchen in a traditionally-styled house may draw too much attention to the fact that the rest of the home needs updating and may reduce your chances of making the home valuable to buyers.

Price of home

A more expensive home improvement project with fancy finishes may get a bigger return in a higher priced home than in one that is moderately priced. In other words, try to look for other opportunities instead of adding high-end appliances or fixtures in a home that does not have the price tag to go with it.

Home improvement projects with the greatest returns

When considering which home improvement project to undertake, one should always consider enhancements that anyone can appreciate and deliver the most return. These are typically places within the home that get the most use kitchen, bathroom and entertainment spaces; along with areas that improve the aesthetic quality of the home.

Think about working with an architect or interior decorator before you get started to determine the best projects and approach to maximize what you get for what you spend. These professionals may see a way to make changes that can save you time and money that you might not have realized.

With these costs may come some additional benefits depending on the type of project. Some unexpected extras may be:

  • Increased energy efficiency
  • Additional space/square footage
  • Rental income for basement remodels
  • Curb appeal

Other improvements that may make a difference, especially in older homes, are upgrades to the home’s wiring, plumbing and heating/cooling systems.

Of course, you don’t have to spend a lot to make a lot. Smaller projects that may give you a big bang for your buck include:

  • Landscaping with native plants, which can reduce water consumption
  • Weather stripping around doors and windows to increase energy efficiency
  • Adding a programmable thermostat to better manage energy usage
  • Installing a steel front door for added security and energy efficiency
  • Putting in a new garage door, which can increase curb appeal and assist with energy efficiency

Stay focused on what can be done within your budget to complement your own lifestyle while still enhancing your home’s resale value. Projects that typically don’t increase resale value are those that are unique to you and your tastes. Not everyone may want a swimming pool or music studio, for example, but if you get use and enjoyment from these, then there is intrinsic value in those improvements because they add to the comfort you get from your home.

If you do decide to sell your home after making improvements that are specific to your tastes, you may be able to market them in a way that can be of interest to others. For example, a family may appreciate the swimming pool while someone who works from home may appreciate the additional square footage that you used as a music studio.

To learn more about using a loan from Discover® Home Loans for home improvement, call your Personal Banker at 1-855-361-3435 today.

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