In the hot Bay Area housing market, home remodeling projects can be an excellent investment—helping to optimize your home’s selling price and substantially increasing its resale value when you seek an appraisal for a home equity line of credit or a new mortgage. When considering where to sink your dollars for the best return, keep in mind that your city and neighborhood should have an impact on prioritizing home enhancements and budgeting for these projects. For a short list of home upgrades that tend to provide the best pay off in any market, take a look at our top five below:
Basic maintenance: From a buyer’s perspective, it’s often hard to get past structural damage such as a leaking roof and the realization that a home is not fully functionally due to problems with plumbing, an air conditioner that doesn’t work, and broken appliances. In general, people want to know that they don’t have to put additional cash into a home just so that it’s in working order. Considering that improvements such as a new roof often cost upwards of $26,000 in the San Francisco area, it’s easy to understand why this is. Fortunately, investments made in basic upkeep like a new roof also tend to recoup more than 100 percent of the cost. Moreover, by doing regular, ongoing maintenance on your home, you can often prevent damage that will cost you more the longer you wait to address it.
Exterior improvements: In terms of maximizing your home’s value, perhaps no other enhancement weighs as heavily as the curb appeal factor. Simple landscape improvements can make major impact— such as adding color and interest with native or drought-tolerant trees, shrubbery and plants. Pruning overgrown greenery, adding ambient lighting, and keeping your lawn healthy and well-groomed will also pay off in terms of boosting your property’s value. In addition to landscape design, don’t overlook the importance of exterior improvements on your home itself. You can realize a marked increase in your home’s value by replacing your siding or having a new front door, windows or garage door installed. For example, replacing a garage door that is worse for wear often allows you to regain more than 165 percent in terms of resale value in a mid-price area in San Francisco (source Remodeling magazine’s Cost Versus Value 2016 Report).
Kitchen upgrade: As a point in a home where people tend to congregate, an attractive and updated kitchen is a major selling point for potential buyers. It’s also an area of your home where you can easily earn back more than 135 percent of your costs in resale value. In many cases, you’ll receive the best increase in value with a minor remodel rather than a complete redesign. This might include upgrades such as a new backsplash of ceramic tile, replacing outdated appliances with stainless steel, and installing a new sink and faucet. Other typical upgrades are replacing cabinet fronts with raised-wood panel and new hardware, swapping out laminate for stone countertops, and replacing vinyl floors with materials such as natural wood, bamboo or ceramic tiles. Adding a rolling island is another relatively inexpensive way to refresh your kitchen’s look and make it more serviceable and inviting. Just be sure not to overspend on your kitchen—features such as custom-cabinetry and luxury-brand appliances may seem desirable, but they may not make much financial sense in a neighborhood where pre-manufactured cabinet systems and standard appliances are the norm.
Minor bathroom remodel: Like kitchens, bathrooms rate high in terms of providing a solid return on your money. But as with your kitchen, you’ll get the most bang for your buck if you are careful to not overspend on materials or features that other homes in the neighborhood don’t offer or are rarely used—such as an oversized, luxury Jacuzzi® tub. Some sensible upgrades include: adding a new solid-surface vanity counter along with new faucets and an under-mount (integral) sink, replacing flooring with ceramic tile, switching out overhead lights for wall mounts, and replacing the toilet. You may also want to consider adding a floor-to-ceiling shower with stone surround tile.
Repainting: We’d remiss if we neglected to mention that a fresh coat of paint is one of the easiest, most cost-effective ways to beautify the rooms in your home. Painting the exterior of your home is also a great way to enhance your home’s curb appeal without shelling out major bucks. Even if you prefer not to do the painting yourself, repainting is still a low-cost investment that goes far in terms of increasing the value of your home. Looking for some help in selecting paint colors for your home? Real Simple magazine has some terrific suggestions at http://bit.ly/RealSimpleTopPaintPicks!
Are you seeking funds to start a remodeling project that will make your home a more enjoyable place to be—while increasing its value on the market? Or are you ready to tap into the sweat equity you’ve already built in your home to pay for your child’s education, create a financial emergency cushion, or to realize a long-time goal? A Home Equity Line of Credit (HELOC) from SFPCU can make this possible now! For details and to apply, visit http://bit.ly/HELOCFromSFPCU.
*APR = Annual Percentage Rate