Is your neighbor's home worth more than yours?

Keeping up with the Jones’s is a well known term, especially amongst homeowners. From keeping a crisp lawn, Christmas light displays, automobiles, and especially the overall value of your home. Is your neighbor’s home worth more than yours? Is their home lowering or raising your property value? These are all questions every homeowner asks themselves.

Current Home Values

What raises your property value?

Many home improvement projects don’t add value to your home, especially in a down market. In fact, some improvements can even detract from the asking price when you decide to sell. On the other hand, some projects can add significant value to your home. So which home improvement projects should you invest in, and which projects should you avoid? Below are some helpful tips for home improvement projects that increase the value of your home, and home improvement projects to avoid altogether.

1. Remodeling the Kitchen

Most people consider the kitchen to be the heart of the home, and because of this, updates in this room pay off. According to HGTV, you can expect to recoup 60%-120% of your investment on a kitchen remodel, as long as you don’t go overboard. You should never make your kitchen fancier than the rest of the house, or the neighborhood.

Why You Shouldn’t Invest in a Deluxe Kitchen
For example, a historic home in my neighborhood has been on the market for more than two years. During the owner’s last open house, I went in to check it out, and immediately saw why the house hasn’t sold. The quaint Arts and Crafts style home was built in 1900 and has a lot of charm. Unfortunately, the homeowners had invested over $60,000 upgrading the kitchen.

The enormous kitchen, easily the size of the living room, features appliances and countertops that might look more at home in a fancy restaurant kitchen. The style, size, and quality of the kitchen don’t fit in with the rest of the house, or the neighborhood. If you plan on selling your home within the next five years, keep potential buyers in mind before you start on any major remodel; many people won’t pay for a fancy, deluxe kitchen.

A Little Paint Goes a Long Way
When it comes to how much you spend on a kitchen remodel, prices can run the gamut, from $5,000 to $75,000, or more. Get the biggest bang for your buck on a kitchen remodel by looking at color. Fresh paint, in modern colors, can go a long way towards updating the look of your kitchen. Plus, paint is relatively cheap.

You might want to consider using low-VOC paint; this makes your kitchen more eco-friendly, and helps your family avoid breathing in dangerous chemicals, like benzene, that off-gas from regular fresh paint.

Energy-Efficient Appliances
Replace old appliances with energy-efficient models. Energy Star-rated appliances are better for the environment, and they also help you save money, because they use less energy. Potential buyers often look for ways to save money when shopping for a new home.

If you’re looking upgrade your appliances to save energy, learn more about the the best time of year to buy large appliances.

2. Bathroom Addition

If your home only has one bathroom, you can recoup a large chunk of your investment by adding another one. HGTV estimates that you can recoup 80%-130% of whatever you spend adding a bathroom.

When it comes to finding room in your house for an extra bathroom, take a look at any extra rooms or underutilized spaces. Consider other spaces, such as closets or areas under the stairs, too. If you want a half-bath you need at least 18 square feet. If you want a full bath, including a stand-up shower, you need at least 30 square feet. If you want a bathtub, make sure you have at least 35 square feet to work with for a bathroom addition. See these bathroom design and remodeling ideas to get you started.

Like any project, the cost of adding a bathroom depends largely on the types of additions and accessories you want to use, and the cost of each of these items. You can save money by frequently checking Lowe’s and Home Depot; they often drastically reduce prices on sinks and toilets that have been floor models. You can also find great prices on tubs, doors, toilets, and fixtures if you shop at a Habitat for Humanity ReStore.

3. Reinventing a Room

Adding more square footage to your home with a new room can be an incredibly expensive project. Although you can recoup some of your investment, anywhere from 50%-83%, this project’s costs can quickly spin wildly out of control. Just turn on any of those home remodeling TV shows; projects that start off with a $15,000 budget quickly turn into $30,000 or more when homeowners and contractors run into unexpected problems.

Reinvent the existing space in your home to save money. Finish a basement, or convert the attic to a bedroom. Many homeowners can also add small apartments in, or over, their garages – which they can then rent out as a room.

Before you demolish walls and rafters, try to think about the ways that you, and potential buyers, can use the space:

• Versatile rooms have greater appeal to potential buyers.
• Basements frequently work well as second living rooms, or game rooms. Many people also turn this space into a small apartment for an aging relative or a tenant.
• Attic spaces often work well for craft rooms and game rooms, especially if they have high ceilings. If you have kids, you can add swings to the rafters, and create a cool play room just for them.

According to Remodeling Magazine’s annual Cost vs. Value report, an average basement remodel, with the addition of a wet bar, costs $64,000. You can save a significant portion of this by doing the work yourself, but even then, adding a new room can be expensive.

Click here for more tips on increasing your property’s value.