While filing your income tax return may be one of your least favorite financial tasks to tackle each year, there may be a silver lining. After preparing and filing your tax return, you may learn that the IRS owes you a nice refund. Some people may receive a few hundred dollars, and others may receive thousands of dollars or more. You could blow a huge refund on a nice trip or a big screen TV, but a better idea may be to invest it back into your house. Did you know that there are many excellent home improvement projects that can improve the look and function and increase your home’s resale value at the same time? These are improvements that you could enjoy now and possibly help pay off when you get ready to sell your home.
Smart ways to increase your home’s resale value with your tax refund
Before you jump into a series of smaller home improvement projects or before you get the ball rolling on a larger project, take time to assess your home’s needs. Are there areas of your home that are a daily source of frustration because of how poorly designed they are? Are you embarrassed by any areas of your home when friends stop by for a visit? Do you wish your home was more functional for entertaining? While you understandably want to make improvements that increase property value, you also want to generate true enjoyment from the improvements that you make. These are some of the many excellent ideas that you can consider if you want to increase your home’s resale value with your tax refund.
1. Renovate the bathroom
Bathrooms are notorious for being difficult to remodel. This is because so many of the features in a bathroom are built in, and permanent changes to the house are necessary to improve or update them. You may think that the cost to renovate a bathroom would be too high for you to consider, but you may want to think again. A low-grade bathroom renovation for a small room can be completed for a few thousand dollars, and a reasonable renovation may cost less than $10,000. The actual cost will be based on the finishes that you select, the scope of the work and the size of the bathroom. If you are unhappy with your bathroom’s style, storage space, or overall layout, a renovation is a great way to turn things around. If you want to enjoy the greatest return through an increase in your home’s resale value, choose finishes and color schemes that may be appealing to a wider range of buyers. Some sources indicate that you could see approximately a 66 percent return on your investment through a bathroom renovation.
2. Replace the front door
You may not think about replacing the front door when you think about making serious home improvements that have a significant impact on resale value. However, the front door and entryway are focal points for online photos of the exterior of the home. This is a space that is also a focal point when buyers are preparing to enter the home for a tour. This means that the entryway and front door can impact interest in the property as well as set the tone of the tour when the buyer is onsite. You can spend less than $500 to more than $3,000 on a front door, and this gives you plenty of variation to choose the right look and material for your budget. You can expect to recoup as much as 91 percent of the cost of a new front door and entryway. If you want to jazz up your curb appeal even further, consider investing in the redesign of your front yard’s landscaping plan.
3. Install a wood deck
Outdoor living areas are increasingly common. Buyers are looking for homes that offer an attractive, comfortable place to relax with friends and family outdoors. Many homes are built with a small concrete slab patio, but you can improve the look and function of your backyard by installing a deck. Even a modestly-sized deck that has a very reasonable installation cost can have a dramatic improvement on your home’s outdoor living space and overall appeal. As much as 75 percent of the cost of an outdoor deck installation project may be recouped through an increase in resale value. If funds permit, you could even spruce up the backyard with other features, such as a fire pit, misters or other features that will wow buyers.
4. Invest in a new HVAC system
When you list your home for sale, buyers may ask you what your average energy cost is. They may also ask about the age of the HVAC system. The HVAC system is not a glamorous or aesthetically pleasing component of the home, but it is essential for comfort and even safety year-round. In addition, it affects your energy costs regularly and your potential repair costs. These are hot buttons for buyers. A new HVAC system offers buyers true value, and you can reasonably expect a higher resale value if you invest your tax refund on the installation of a newer energy-efficient HVAC system. The cost of a new HVAC system varies based on the size of the unit, the model and other factors.
5. Choose a stylish garage door
The front door is not the only feature on the home’s exterior that can attract attention of buyers. The garage door is an even larger and more prominent exterior feature. Unfortunately, many garage doors installed by manufacturers lack style. Your current garage door may look like the feature on every other home in your neighborhood. If you want your home’s exterior to stand out in a positive way, replacing the garage door with a more stylish model is an excellent idea. The cost of a decorative garage door may cost between $1,000 to $2,000, and a custom stained wood garage door may cost up to $3,000. You may be wondering how much of this cost is recouped when you sell the home. You can realistically expect roughly the same return on a garage door replacement as you would on a front entryway renovation or update. This is a return of greater than 90 percent.
Get the most value from your home and your tax refund
Before you make any improvements to your home, take an honest assessment of your home’s most critical needs. It may even be helpful to ask a real estate agent for advice. Investing your tax refund back into your home is a smart way to bolster your home’s equity. This is equity that you can access when you sell your home in the future. If you are thinking about selling your home soon or if you simply want feedback and recommendations about some of your improvement ideas for your home, contact a trusted CENTURY 21 Northwest agent for professional real estate advice. Our Realtors are always up-to-date on features that local buyers are most excited about when touring homes and can help you plan renovations or improvements that will have the best impact towards selling your home.