For most of us, our homes are our largest investment. They take the lion’s share of our budgets when you factor in mortgages, utilities, taxes, association dues, and repairs and renovations. With so much invested in your home, making the highest return possible is always important.
The value of your home is determined by many factors. Some of these factors are beyond your control, such as interest rates, the broad economy, and the local economy. While you may not be able to affect the rate of inflation or the number of people moving into your neighborhood, you can increase home value with home improvements.
Many homeowners have it in their minds to make some improvements. A lot of ideas come from personal taste, and while decorating home the way that makes you happy is great, it’s also important to think about what renovations will increase your home’s value. Here are the big ones:
Kitchen
Kitchens are the center of the house for most people. Of all the rooms in a house, this is the one that most affects a buyer’s perception. Is your kitchen older and in need of a renovation? If so, you’ve got the place to start to increase your home value.
When selecting countertops, cabinets, sinks, floors, etc., be careful not to get carried away. Updated and fancy is two different things. If fancy fits the house and the neighborhood, then, by all means, select the granite countertops and accouterments that match. A million-dollar house in Scottsdale should have a million-dollar home’s kitchen. A $100,000 house in Mesa should have an attractive, nicely updated kitchen but nothing you would see on a gourmet cook show. If you put in a kitchen that’s too fancy for the house and the area, you will never get the money you invested back. By keeping it in the right price range, you get a great ROI.
Bathroom
If you don’t have enough for the size of the house, bingo. The added bathroom always helps. If space is tight, consider some underutilized areas, such as under the stairs or in the space of a closet that serves little purpose. You’ll need about 18 square feet for a 1/2 bath, 30 square feet for a full bath, and 35 square feet for a full bath with a tub.
If you have enough bathrooms, updating the current ones is a great bet. As with the kitchen, don’t go overboard. Buyers of mansions in Paradise Valley have different expectations than buyers of three bedrooms in Marana. Make your bathrooms match expectations.
Paint & Windows
For a small investment, you can make your property sell with fresh paint and new windows. It’s amazing how much buyers appreciate a freshly painted house. Windows are a great investment if they are looking old and outdated. They increase curb appeal. In Arizona, energy-efficient windows and blinds not only cut your utility bills, but they also increase home value.
Swimming Pool
With 300 days of sun per year, desert Arizona is a place for pools. Whether one helps value really depends on where you live and what kind of house you have. Many houses are well-suited for a small, inexpensive pool and spa with a nice outdoor sitting area. If you’ve got a huge space and a big house, a larger pool might be in order.
In northern climates, a pool might be a detriment to selling a home, but in Arizona, it’s hard to make that argument, as long as the pool matches the property and area. However, pools are perceived by some as a safety hazard for children and an extra chore. Installing a gate and making the pool as maintenance friendly as possible help.
Financing Renovations
Financing home improvements can be a struggle, especially if your credit has fallen out of the ideal range. Often, homeowners find themselves needing to tackle projects before putting their homes on the market, projects that stand to increase the sale price. When they cannot find conventional financing, they can feel caught between a rock and a hard place. They need to prepare the house for sale, but they cannot get the funding.
Hard money loans are designed to solve this type of problem. These loans are based on the value of the home, not credit score or income verification. If the home has 20 percent or more equity, the owner likely qualifies for a hard money loan.
These asset-based loans are designed as short-term loans to fund renovations. Once renovations are complete, the borrower then sells the home or refinances into a conventional-style mortgage.
Prime Plus Mortgages provides asset-based loans throughout Arizona. For a renovation project, Prime Plus Mortgages offers loans based on the after repair value (ARV). The ARV takes into account the rise in the home’s value after the repairs, so you can obtain a loan large enough to cover construction costs. If you need a loan for home improvements, call Prime Plus Mortgages today.
