If your home needs a little work, it can be hard to decide which project is worth the investment. So, what is equity and why does it matter for a remodel? Equity is the difference between how much you owe on your mortgage and the fair market value of your home.
When it comes to building equity, some remodeling projects will give you a lot better bang for your buck. The goal of any project should be to boost livability and increase your home’s value.
Before you break out the hammer, check out these five ways to boost your home equity. From finishing your basement to replacing your garage door, this guide has everything you need to know about how to raise your home value.
1. Finish Your Basement
Basements hold a ton of untapped potential. Finishing a basement can add some major square footage. This article provides a round-up of the different floor options that are perfect for basement updates.
In an unfinished basement, you have the ability to add bedrooms and bathrooms, as well as more living space. The more bedrooms you have, the more the value of your home goes up. You’ll see a 70-75% return on your investment when it comes to finishing the basement.
2. Replace Carpeting
Carpeting is less valuable than hardwood, vinyl, or tile when it comes to flooring materials. If you currently have carpeting that needs replacing, switching it out for new carpet will make your home show better but it might not increase the value all that much.
Instead of putting in new carpet, consider investing in hardwood, engineered hardwood, vinyl plank flooring, or tile.
3. Add a Deck
Adding a deck to your home offers a great return on your investment. Not only will it boost your equity but it also enhances your quality of life. You’ll have more useable square footage outside and a ton of extra entertaining space.
In terms of home improvements, a deck is well worth the money. When you sell your home, a deck is almost universally appealing to buyers. In the meantime, you’ll also be surprised at how much time you and your family use it.
4. Minor Kitchen Remodel
Kitchen remodels can be expensive. While a great kitchen can help sell a home, you can definitely overspend. If you’re looking to remodel your kitchen while still building equity, scale down your project. If you’re just going for your ultimate dream kitchen, go for it.
To best recoup what you spend, focus on updating appliances, resurfacing cabinets, and changing out lighting. You can give your kitchen an inexpensive facelift without massively remodeling.
5. Boost Your Curb Appeal
Your front yard is the first thing buyers see. When guests and potential buyers walk up, they will be able to tell pretty quickly how well you’ve maintained the home.
Make a good first impression by replacing your old front door. A steel door is energy efficient which is a nice bonus. Fiberglass doors can look like wood, but they are less expensive. These will also give you a lot of longevity.
Garage doors are also a great place to add equity. Replace your garage door and your home will increase in value and look great from the front.
Raise the Equity of Your Home
Fixing up your home comes with a lot of decisions. While you want a fresh look you also want to be smart with your investments. From your curb appeal to your kitchen, these five updates will help increase the equity of your home.
Remember that you don’t need to spend a lot to boost your home’s resale value. For more great home and DIY tips, check out the blog section.