Renovating, remodeling, and improving your home can be great ways to give it a makeover, gain extra space, or otherwise make it possible for you to stay in one place longer. But will they increase your selling price? The day may come when you want or need to sell. In preparation for that possibility, realize that not all home improvements are created equal. Some will increase the value of your home, and some will actually make selling more difficult. Here's how to tell the difference.
Projects with the highest resale value
Certain projects add more resale value than others. Here are some that generally have the best financial impact.
Kitchens - People like to see modern conveniences and styles in the kitchen. Especially in older homes, kitchen improvements tend to add value. Read the real estate ads sometime -- you're sure to notice how many mention the updated kitchen features.
Bathrooms - Second to kitchen remodels are bathroom remodels. Again, modernizing older styles or appliances usually results in good return.
Outdoor improvements - Your house makes a first impression quickly, so sprucing up its outdoor appearance is a smart investment. This includes siding (fiber cement tends to cost the most, but has the best return) and landscaping, particularly in the front yard.
Roofs and windows - Roofs and windows are expensive to replace, and buyers expect these to be in good condition. Unfortunately, that means that while replacing them won't dramatically increase resale value, not replacing them could significantly decrease it.
Here are some general indicators that a project might have negative resale value
Luxury upgrades - While no one wants to see the absolute cheapest renovations in a home, the highest-quality upgrades often don't have the return of mid-range ones, unless you're in a very high-end home. Marble floors in the bathroom or custom cabinets in the kitchen may be nice, but you shouldn't assume buyers will pay proportionately for these luxuries.
Rooms that don't fit with the floor plan -Converting the back patio to a family room may be a perfect way to add more space to your home but, if your dining room window now looks into the family room, it probably won't be well loved by buyers.
Garage conversions - Garage conversions can give homeowners much needed space, but buyers like having garages, so converting this space usually won't increase value.
A swimming pool - A pool may seem like the ultimate luxury to you -- but when it comes to selling it could be more of a hindrance than a help. It may be seen as a safety hazard by parents with small children.