To know which upgrades you should make to your home, there are five questions you need to ask yourself.
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Here are the five questions you need to ask yourself to know which home upgrades will give you the biggest bang for your buck:
1. Does it make sense? Does it make sense for you to invest money into your property? If your home is in an area you don’t want to live in anymore and you’re ready to move, it probably doesn’t make sense to invest any money into it other than what can be put toward getting it ready for sale.
2. Does it make sense economically? Do you have the cash on-hand to put into your property in order for the renovation to be a successful investment? Sometimes in this situation, homeowners take out a home equity line of credit at a typically low interest rate. If you do something like this, the goal is to pay off debt immediately. I don’t love second mortgages, so my advice is to not use one unless you don’t have the cash on-hand, you know you’ll be in the house long-term, and you know you’ll see a return on your investment.
3. Will you see a return on your investment (ROI)? To know if a renovation makes sense, you need to understand the market you’re in and the type of property you have. Do you really need marble floors installed into your $300,000 home or would hardwood or laminate floors make more sense?
4. Will your upgrade(s) be sellable? Sometimes we want to make an amazing upgrade, but it just doesn’t make sense to do so. I’ve seen people make adjustments to their home where their space was so unique that it made it difficult for anyone else to move into that space
5. Will your upgrade(s) make sense long-term? Anytime you put money into a property, it has to make sense in terms of the general market. You might want to take out three bedrooms and two bathrooms on your main level and turn them into one master bedroom and one master bathroom, but your neighborhood might not be conducive to those upgrades. That neighborhood, for instance, might be in a price point more appropriate for first-time homebuyers or those looking for a move-up property. You don’t want to make upgrades to your home that will hurt its value.
One of the goals I want to help you with is to build wealth through real estate, and asking these kinds of questions can accomplish this goal.
If you have any questions about this or any other real estate topic or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d be happy to help you.