Thanks to Capital One for sponsoring this post.
When it comes to home improvement projects, my favorites are the ones that add true bottom line value to a home.
After all, your house is probably the biggest investment you’ll ever make. As a real estate blogger and journalist, I want to see homeowners increase the value of their property in big ways and in every way possible. That’s true whether they’re planning to sell and looking to increase their asking price, or simply wanting to enjoy their home more while they’re in it.
Some of the smartest home improvements I’ve seen over the years are big and sexy (think glorious new master suite with an extraordinary, spa-like bathroom retreat), but some are more “behind the scenes” and add value to the house in less obvious ways.
I’d love to tell you all about them…
When I talk to homeowners about home improvement projects, unsurprisingly, cost is always a factor. For this reason, I talk to them about their savings, and the possibility of taking out a home equity loan or line of credit. Either of these options allows them to borrow against the equity they’ve already built in the property and usually means way lower interest rates than an unsecured bank loan. Regardless of your project, it is best to have enough cash at the best interest rate to ensure a complete, well-executed renovation.
When I think back to my favorite renovations from the past, they are almost always a fresh new kitchen or a master bath suite. I cannot tell you how many times buyers are turned off by shortchanging these spaces. In fact, just last week, a buyer turned from a $6 million dollar Highland Park home because of the master closets – too small.
Or the home down the street from me that won’t sell — 12 months on the market — because the owners failed to raise the ceilings during their remodel.
If you are remodeling a ranch-style home, please try to get the ceilings up over eight feet in as many formal spaces as you can. You can get away with lower 1950’s style ceilings in some rooms — a cozy study, a powder room, bedrooms. But make sure the foyer and formal areas have what every buyer wants today: ten foot tall ceilings.
If you decide to remodel your master bedroom into an adult oasis, good for you — you deserve it. Don’t be afraid to add space to the current footprint to make sure your spaces are large enough: create an oasis of a bedroom with a separate seating area, desk or reading nook, room for a king-sized bed and side tables, hardwood floors, and big windows that let in the sun.
The bathroom is where homeowners can really show their style. Think huge frameless “car wash” glass showers with body sprays, Carrera Marble tile, and a seating bench. Don’t forget an alcove or shelf to hold shampoo bottles. Marble belongs everywhere in the bathroom, with double sinks, expansive counters, plenty of storage drawers and flattering lighting.
Speaking of flattering, make getting dressed and primped every day easy, peasy. Build your electrical outlets right into your drawers so you never have to unplug your hair dryer. Consider a built-in towel warmer or heated towel bar. And walk-in closets should be as big as the island of Manhattan, possibly bigger. An organization system in the closet is a bonus, and his-and-hers closets are a double bonus. Don’t forget a third closet for linens and towels. And if you really want to go all out, add a stackable washer/dryer into one corner of the closet: talk about popping your clothes into the wash!
According to the 2015 Remodeling Impact Report, the cost for a master suite addition ranges from about $60,000 to $112,500. And I have never, ever heard of a buyer who said, “This master bedroom is too much!”
One behind-the-scenes home improvement project that makes a big difference to the bottom line value: extra insulation. Sexy? No. Big return on investment? Absolutely. Added plus: your home will be warmer and cozier in the winter. In fact, the 2016 Cost vs. Value Report by the National Association of REALTORS® and Remodeling Magazine estimates that in Dallas, adding fiberglass attic insulation has a return on investment of 100.9 percent!
Another unexpected project with big ROI I’ve seen? Garage door replacements. This is one of the most painless ways to change a home’s curb appeal from crud to stud! Think real wood or frosted glass opaque doors that let the light stream in. This ranked among the top five most profitable projects nationwide, and in Austin, Dallas, El Paso, Houston, and San Antonio. Garage door replacements recouped up to 112.1 percent of the total project cost.
One of the benefits I’ve seen of using a home equity loan or line of credit is that the interest paid on your home equity loan may be tax deductible, just as your mortgage is. Also, the average home equity APR is typically lower than what you’d have with a personal loan or credit card APR. (I would never recommend using a credit card for major home improvement projects, unless you plan to pay it off in 30 days.)
What’s the difference, you may ask? A home equity loan is probably the best option if you know your exact budget and want consistent payments with a fixed interest rate. Homeowners receive a set amount of cash as a lump sum, then pay it back on a regular schedule over several years, like a mortgage. These loans have low fixed rates, and terms generally range from five to 20 years.
A home equity line of credit is really great if you’re not entirely sure how much cash you need. Homeowners are given a set credit limit, based on a percentage of the equity they have in their home. The interest rate is variable, but they do have an option to lock in the rate at the time you get the line of credit.
They also have the option to make interest-only payments during the first 10 years.
If you want to learn more about the great flexibility of home equity lines of credit, head over to Capital One. They have great tools that make it easy to figure out which option is best for you. Do check out their “Help Me Decide” tool to learn the benefits of a home equity loan or line of credit and which is right for you. Then sit back and let your home improvement dreams come true.