Best home improvement projects to increase your home value
Homeownership is a powerful investment tool. The more value you add to your home, the more you'll make back when it's time to sell. If you're a homeowner with little cash but a lot of equity, then a HELOC (or home equity line) may be the financial tool you need to perform home remodels and repairs, which ultimately can increase your home's value.
Some of the best ways to use your home equity to add value to your home include landscaping, replacing old garage doors and front doors, painting interior and exterior walls, modern kitchen remodels, updating bathrooms, replacing or repairing damaged roofs and HVAC systems, upgrading insulation, improving energy efficiency, and replacing windows. Understanding trends in your local real estate housing market will help you decide on the projects that will give you the best return on your investment.
Keep in mind that not all home improvement projects and not all home equity lines are created equal. Understanding which renovations will increase home value the most, which add long-term value versus which add short-term curb appeal, and how to budget for remodel projects is an important place to start. Knowing what a home equity line of credit (or HELOC) is, how it can help you leverage your home's equity, and how to decide which one is right for you is important in your decision-making.
This article discusses using a home equity line to add value to your home, which home improvement projects add the most value to your home, explains the benefits of a home equity line, and describes the application process.
How to Use a Home Equity Line to Add Value to Your Home
You'll get the greatest return on your investment by choosing your project wisely and by keeping your costs low. Not all improvement projects are valued equally by home buyers. To get the biggest boost in home value, choose a project that buyers look for when they're purchasing a property, and lower budget projects that give your house a clean look, such as a fresh coat of paint. Here's what you can do to add value to your home with a home equity line of credit (HELOC):
Research which home improvement projects add the most value to your home
Estimate your expenses, including the cost for materials, contractor costs, and overall project costs
Choose the project which will add the most value within your budget
Interior Home Renovations that Increase the Value of your Home:
Kitchen remodels
According to Zillow, kitchen upgrades yield an 80% return on investment, and are a great way to use your HELOC to improve your home value. Large kitchens with lots of storage and stylish counters made from durable materials tend to show well. But, be careful not to overspend (which is easy to do during a kitchen remodel). Buyers may not want to pay extra for gourmet appliances, so avoid high-end charges.
A complete kitchen remodel is a full overhaul that includes new kitchen cabinets, countertops, and appliances, but can come with a large price tag. Granite countertops and energy-efficient stainless steel appliances add the most value.
Partial kitchen makeovers may be a better fit for your budget or leave more cash for other projects around the house. Small upgrades that make the most difference include adding modern backsplashes, updating sinks, adding new cabinet fixtures, and upgrading light fixtures.
Bathroom remodels
As with kitchen remodels, bathroom remodels deliver a good return on investment when they're kept to a reasonable cost in the current market. Walk-in showers, hand-held shower heads, and durable bathroom counters that are easy to clean are popular bathroom features.
Full bathroom remodels will add the most increase in value to your home. Walk-in showers and separate bathtubs are popular in modern design, and current trends tend to opt for neutral colors that are consistent with the kitchen and other common areas of the home. Go a step further with heated floors or heat lamps and upgraded lighting to add a "wow" factor to your bathroom renovation.
Partial bathroom remodels may include replacing outdated tiles or vanities, or simply updating fixtures. Painting walls and cabinets are great ways to update the look of your bathroom without going over budget.
Exterior Home Improvements that Increase the Value of your Home:
Siding replacement
Siding can last for decades, but in time it will start to become faded and dull. Replacing your siding can improve your home's curb appeal while at the same time protecting your home from rain, snow, and harsh UV rays.
Landscaping projects
Landscaping projects are a great way to use the equity in your home to increase value. With landscaping, you can add curb appeal to their property, which can make it more attractive for potential buyers. Adding wise plants such as shrubs and low-maintenance flowers adds a sophisticated and well-cared-for look to your house as a whole. Outdoor lighting is a good way to add value without going over budget. Larger landscaping projects, such as decks, pavement tiles, or pools do add value to your home, but often do not offer the greatest return on investment compared to other projects.
Upgrading front door and garage doors
Replacing your garage door gives your home an instant facelift and a clean, welcoming look. When considering investing in a new garage door, understand that you'll likely receive more than double in return with 133% ROI. This means that if you spend $1,200 on a new garage door, you could potentially get back up to $2,797 when it comes time to sell, giving the biggest bang for your buck of all. Furthermore, you can expect better security and improved insulation once you install a quality new door. It's no doubt worth considering if you're looking for ways to boost your home’s worth.
Replacing your entry door with a steel one is an upgrade that makes sense from both a functional and financial standpoint. Steel doors are incredibly energy efficient, providing superior insulation to keep the warm air in during winter and cool air in during summer. They’re also low maintenance, requiring only periodic cleaning with a damp cloth to keep rust at bay. Plus, steel doors are stronger than traditional wooden or fiberglass models, helping to increase the security of your home. Statistics show that homeowners can benefit financially as well – according to various studies across the country over the past four years, replacing an existing entry door with a steel one has recovered anywhere from 65% to 91% at resale.
Replacing old, inefficient windows
Replacing the windows in your home is a great way to improve the value of your property and lower your monthly energy bills. Vinyl frames are a particularly cost-effective choice when replacing your windows since they’re lightweight and low maintenance. Window replacements yield around 65-70% of your money back should you choose to sell down the line. In the short term, you will enjoy lower energy costs, increasing your percent ROI overall.
New Roof
A new roof can significantly increase the value of a property. Not only does it improve the home's initial visual impact, but many potential buyers view it as a sign of overall good building quality which increases confidence. A roof that is not in need of repair or maintenance also indicates that other parts of the home are in good condition, increasing its worth. Furthermore, a new and high-quality roof can last up to fifty years and protect the house from environmental factors such as storms and snowfall. This has an immediate positive effect on the worth of the property.
What Is a Home Equity Line?
A home equity line allows you to borrow against the equity you have accumulated in your home as a way to complete a remodeling project that increases your home's overall value. Factors considered to determine the amount of loan you qualify for can include the current value of your home, the amount of equity you have in your home, your income, and your credit rating.
The benefits of a home equity line include:
Interest rates that are typically much lower than personal loans or credit cards
Funds that can be used for nearly any purpose
Low or no closing costs
Loans against your home's equity are useful for a variety of expenses, including home improvements, home repairs, or student tuition. If you're a homeowner trying to add value to your home, using your funds for a home improvement project can boost your home's resale value. These loans can be also used for debt consolidation to reduce your overall interest payment and streamline your bills.
How is Figure's Home Equity Line Different?
Most home equity lines have variable rates and loan amounts that you draw down like a credit card. Figure's home equity line is different. You'll get a lump sum payout at a fixed rate1navigates to numbered disclaimer, so you'll know how much money you'll be paying every month until the loan is fully paid back.
The application process is easy, secure, fast, and transparent. For most homeowners, applications take as little as five minutes online. Once you're approved, funding can happen in as little as five days2navigates to numbered disclaimer.
When to Use a Home Equity Line from Figure
A Figure home equity line is an excellent loan if you're seeking predictability and stability. Whereas other home equity lines have variable interest rates that are difficult to predict, Figure's home equity line is repaid on a set schedule with a fixed interest rate.
Fill Out an Online Application
A home equity line may make it possible to begin a home improvement project to get the most out of your investment.
