Whether you are planning to move or not, ideally home remodeling projects should impact your home’s value for the better. It doesn’t make sense to put money into your house that you will never see a return on the investment.
Appraisers look at basic structure and floor plan as well as the condition of the house. Then they take your house and compare it to similar houses in your area that have sold most recently. Comparable houses (or comps) in your surrounding area is what will impact the appraisal of your house. However, if you want to do home improvements that will increase your home’s value there are few worthwhile investments.
Adding Bedrooms and Bathrooms
In a home appraisal, a “comp” is determined by the bedroom and bathroom ratio and square footage. For example: a three bedroom, two bathroom house will be compared to other three bedroom, two bathroom houses. If the house is a five bedroom, two and a half bathroom house it suddenly is in a different bracket with different comps—instantly with higher home values. If you want to make sure the appraisal comes back higher, adding bedrooms and bathrooms is a sure way to do it.
Finishing the basement is another sure way to add livable square footage and drastically change your home value. If you have a full basement, finishing the basement could potentially double the size of your house. Plus, most basement remodels add bedrooms and maybe a bathroom—the other factor to increasing home values. Remember, when finishing the basement you have to take care of any water and moisture issues. You do not want to wake up one morning and have your basement flooded or mold and mildew growing on your walls. Basements can be great living spaces if they are prepped properly. It is important to make sure you seal any foundation cracks and completely waterproof the entire basement and foundation. Also test for radon before and after the basement remodel. The best time to install a radon mitigation system is with bare walls and floors.
Home values are figured on the condition of your house. If you want home repairs and investments that increase your home’s property values then invest in your home’s structure. If your home needs repairs, it will decrease your home’s value. From a new roof to a dry basement and structurally sound foundation will be worthwhile investments.
Waterproofing the basement is one of those necessary evils in the home value department. If you don’t waterproof the basement and you develop serious moisture-related problems it will most definitely decrease your home values and put a figurative red x on your house. The protection it gives your house may not increase the value per se but it will protect it from decreasing the value.
Any home repairs and maintenance will be a worthwhile investment in your house because it will keep it in overall good condition.
But remember, a home improvement or addition should not be done just for the purpose of increasing home value. The return on investment for home improvement projects (like a new addition) will take years to recoup. It is best to do home improvements because you and your family want to or need to do the project. Home improvements are not cheap and should be well thought out and calculated.