28 Mar EIGHT Ways to Boost Your Home Value
When Alec and Jennifer Harmes spent $264,900 for their first home in 2011—a 1,500-square-foot ranch fixer-upper in Austin, Texas—they assumed they would be living there for many years. So the couple, millennials in their early 30s, embarked on a series of home improvements to make it suit their tastes and needs. They refinished the kitchen cabinets, and installed new stainless-steel appliances and LED lighting. New engineered wood floors replaced the mishmash of linoleum tiles and musty, high-maintenance carpeting.
Outside, they removed the asbestos siding and installed durable, no-paint fiber cement. They also used that moment to rewrap the house in rigid insulation, improving its overall energy efficiency. Though the Harmeses saved big by doing most of the work themselves (he works in construction management, she oversaw design), the total investment was close to $65,000. They were even planning to build a separate mother-in-law apartment on the property to help lure family to Austin. But their folks didn’t want to relocate, so they made the tough decision to move back to Florida to be close to them. “If we could have picked up that house and brought it with us, we would have,” Jennifer says.
Lorella Martin of Redfin, an online real estate brokerage, was the Harmeses’ listing agent; she set the asking price at $450,000. The first open house was like a feeding frenzy, attracting many young professionals eager to move into the popular Austin neighborhood, she says. And it wasn’t hard to figure out why. “When a home is move-in ready and buyers know they can be cooking in the kitchen from day one and entertaining in the backyard that very weekend, you know you’ve got a winner,” she says.
The house sold for $472,000.
Granted, some of the roughly $200,000 increase in home value had to do with the Austin market’s 20 percent appreciation in the Harmeses’ 3½ years of stewardship. But it’s also a testament to the couple’s savvy instincts about what today’s buyers are looking for, especially now that millennials, 75 million strong, have become the leading cohort of buyers, purchasing 32 percent of homes in 2014.
So let the following renovation rules, driven by shifts in the current housing market and informed by Consumer Reports’ nationally representative survey of 1,573 millennials, inform your decisions on improving your home and its value.
1: The Kitchen Is Still King
Buyers of all kinds have long focused on the kitchen, but it holds particular sway over the newest wave of first-time homeowners. A “modern/updated kitchen” topped the list of ideal home features in our survey of millennials, registering as most important to more than a third of respondents. If you plan to sell, don’t rip your kitchen down to the studs; a smaller investment can have serious impact. For as little as $5,000, you should be able to add a new suite of appliances, as well as a new countertop and flooring, resulting in a fresh, coordinated look. Applying a fresh coat of paint to the walls or cabinets, and updating the hardware, can also breath new life into the space. (Check our kitchen planning guide for more information.)
Stainless steel. Though it has been around for decades, this appliance finish conveys clean, contemporary design, so it will signal “updated” in the mind of the buyer. For the latest spin on stainless, look for new versions of black stainless steel from KitchenAid, LG, and Samsung, each with a softer, less reflective finish but the same cachet as the original.
Quartz countertops. Engineered from stone chips, resins, and pigments, quartz has started to challenge granite and marble as the go-to material in higher-end kitchens. It shrugged off heat, scratches, cuts, and stains in our tests, and it requires none of the upkeep of comparably priced natural stones. Expect to spend $40 to $100 per square foot, installed.
Potential bump in sale price: 3 to 7 percent
2: Make Floor Plans Work Harder
Bigger isn’t necessarily better in today’s market, but strategically increasing the amount of living space is sure to boost home value. An “open floor plan with flexible living space” was second only to an updated kitchen on millennials’ list of most desired features.
Finishing a basement is the most common way to add usable square footage to a home. Most homeowners spend between about $10,000 and roughly $27,000 converting a basement, depending on the size of the space, according to estimates from HomeAdvisor, a website that connects homeowners with prescreened service professionals. Attic conversions are another option. The average attic remodel in 2014 cost $50,000.
Many younger buyers will envision the additional living spaces as a dedicated office, especially if they work from home. And at the other end of the spectrum, “a lot of my boomer clients are daytime caretakers for their grandkids,” says David Pekel, who owns a remodeling company in Wauwatosa, Wis. “They want a playroom that they can close the door to after the kids leave, so they’re not dealing with toys underfoot.”
Flex rooms. Also known as double-duty rooms, you’ll see flex rooms advertised as an additional living area that can serve a variety of purposes, from a guest bedroom to a game room to an exercise room to a study room for the kids.
Mother-in-law apartment. These spaces go by many names, including “granny flats,” “casitas,” and the technical sounding “accessory dwelling unit,” or ADU. They can house an additional family member or provide rental income—allowing baby boomers to afford their house once they retire or helping millennials pay the mortgage. More municipalities, particularly in Western cities, are amending zoning laws to allow for ADUs.
Upstairs laundry rooms. Younger buyers in particular say they want a dedicated laundry room, perhaps off the kitchen or even near second-floor bedrooms. Manufacturers are obliging with washer/dryer sets with a matching fit and finish that neatly integrate into the living space. We like the Maytag Bravos MVWB855DW HE top-loader and Maytag Bravos MEDB855DW electric dryer, $1,050 each.
Potential bump: 4 to 6 percent
3: Don’t Let Your Home Be an Energy Hog
Lowering your home’s energy costs will save you money for as long as you live there and is expected to be a major selling point down the line. Indeed, “energy-efficient” was second only to “safe community” on the list of attributes that would most influence a purchase decision, according to a 2015 survey by the National Association of Home Builders.
Older homeowners who have felt the sting of escalating energy costs tend to be driving the interest. But there are some early adopters among younger buyers, too, especially in regions of the country with more extreme weather. “My millennial buyers usually ask for two years’ worth of utility payments,” says Joe Rivellino, a real estate professional in the Buffalo, N.Y., area. “They want to know the R-Value on the insulation and whether the windows have low-E coatings,” he says, referring to two important efficiency measures.
And don’t forget about water heating, which accounts for 16 percent of energy costs in the typical home. Spending $1,800 to $2,400 on a new unit is another way to impress efficiency-minded buyers.
High-efficiency windows. Energy Star certified windows can lower your home’s energy bills by 7 to 15 percent.
That will be a selling point with buyers, though replacing every window in a home costs anywhere from $8,000 to $24,000, so you probably won’t recoup the entire investment if you plan to sell right away.
LED lights. Some listings emphasize their “green” credentials by mentioning the presence of LED lighting. Choose the Feit Electric 60 Watt Replacement 9.5W LED, a $7 bulb that delivers superb light quality and has a 23-year life expectancy.
Potential bump: 1 to 3 percent
4: Keep It Simple and Stress-Free
Stain-prone stone countertops, grime-collecting ornate cabinets, and dust-catching wall-to-wall carpet used to be symbols of luxury, but today’s homebuyers are more likely to equate them with extra work. “We call it stress-free living,” says Miguel Berger, president of Better Homes and Gardens Real Estate Tech Valley in Albany, N.Y. “The younger generation in particular would much rather spend their time entertaining at home than fussing over it.” It’s safe to assume boomers feel the same.
Beyond a home’s cosmetic finishes, it’s important to keep the major mechanical systems in working order. Many first-time buyers will have used up much of their savings on the down payment, so they want to know that the heating system, plumbing, and electricity have been recently updated. Central air conditioning is also in demand because it eliminates the need to switch window units in and out. HomeAdvisor puts the average cost nationwide at just more than $5,000.
Updated systems. In addition to including the age of the system, it helps if you can also point to its reliability. For example, Consumer Reports surveys have found American Standard and Trane to be among the least repair-prone manufacturers of gas furnaces.
New roof. This will help assuage fears of water damage, ice dams, squirrel infestation, and other home disasters that can result from an old, shoddy roof. For a typical 2,300-square-foot house, you might be able to put on a new asphalt shingle roof for as little as $6,000.
Hardwood floors. More carpets are being replaced with long-wearing hardwood flooring with a durable factory finish. Engineered wood flooring, which uses a thin veneer of real wood or bamboo over structural plywood, tends not to wear as well as the solid stuff, though it has the same look and tends to cost less, making it a good choice if you plan to sell soon.
Potential bump: 3 to 5 percent
5: Build a Home for ‘the Ages’
By 2040, there are expected to be almost 80 million seniors accounting for 21 percent of the population. The existing housing stock isn’t equipped to safely accommodate that many older people—too many steep staircases, narrow walker-unfriendly doorways, and slippery step-in bathtubs and showers. Forward-thinking homeowners are making necessary improvements to their home now—and those changes will benefit people of all ages, not just seniors. According to a 2015 survey by HomeAdvisor, 56 percent of homeowners who hired a pro for aging-related projects were younger than 65, and 10 percent were younger than 50.
Walk-in shower. “People in the 50-plus age range don’t want to step over the tub to take a shower,” Pekel says. Curbless showers eliminate the threshold between the shower and surrounding bathroom, making them wheelchair accessible, not to mention sleek and streamlined.
Master on main. A floor plan in which the master bedroom is on the first floor reduces the need to climb stairs. “It’s probably the most desired feature among boomers,” says JP Endres, a real estate professional based in Westchester county, north of New York City. Creating a truly functional master-on-main suite usually involves a multiroom renovation, which can cost upward of $35,000.
Comfort-height toilets. These toilets are a few inches taller, which makes getting on and off easier. Most top flushers in our tests are comfort height, including the Glacier Bay N2428E two-piece toilet, which sells at Home Depot for $100.
Potential bump: 1 to 2 percent
6: Paint Is Still a Potent Upgrade
Paint keeps your home looking its best while also defending its surfaces from wear, tear, and the elements. If you’re getting ready to sell, don’t blow thousands having every square inch repainted. Instead, focus on high-traffic areas, including the kitchen and bathrooms. “Your home has to look better on the day of the open house than it’s ever looked before,” says Steve Clark, a real estate professional in Los Angeles. “If the back door is covered in scratch marks from the dog, you have to fix that.” Do the job yourself for about $100 in material costs or pay a professional $1,000 or so, which should cover multiple rooms.
Neutral color scheme. Whites and off-whites remain the top-selling interior colors and will appeal to most homebuyers, allowing them to envision the space as their own. Neutrals appeal to all generations of buyers, according to Jule Eller, trend and style director at Lowe’s.
High-quality paints. Home Depot’s Behr Marquee, $43 per gallon, is our top-rated interior paint. For outdoor projects, Behr Premium Plus Ultra Exterior, $39 per gallon, and Clark+Kensington Exterior from Ace Hardware, $35 per gallon, offered the best protection.
Potential bump: 1 to 2 percent
7: Remember the Great Outdoors
Your home’s property is another opportunity to expand its living space. Adding a deck or patio, with room for seating and a built-in or freestanding grill, is a way to create a defined space for outdoor living on a large or small scale.
But remember the rule of low upkeep, especially if your future buyer is likely to be a millennial. “They love outdoor spaces, but whereas prior generations might have gone for the pool, Gen Yers recognize the maintenance costs associated with it,” Berger says. “They’d much rather see an outdoor fire pit surrounded by a simple seating arrangement.” Don’t go for overly lush landscapes, especially in drought-stricken regions with high water costs. (Check our guide to outdoor living.)
Curb appeal. Trimming overgrown shrubs and making minor repairs to the façade, including painting the front door, can deliver quick results. Replacing worn-out siding is a major undertaking, costing $12,000 on average, but it can give your home a complete facelift.
Water-smart yard. Replacing a section of turfgrass with native ground covers or pea gravel will reduce the maintenance costs while adding visual interest.
Potential bump: 3 to 5 percent
8: Make Sure Your New Technology Is Smart
High-tech features offer notoriously bad returns on investment because technologies tend to evolve quickly. “One of the biggest losers in recent years is the fully wired audiovisual system,” says Duo Dickinson, an architect based in the New Haven, Conn., area. “They’ve probably lost 80 percent of their value since everything went wireless.”
But certain smart devices add to home value and interest, including programmable thermostats. “I’ll often install a Nest thermostat in a home that doesn’t have one because it creates the impression that this is a high-tech home,” Berger says.
We’re seeing the same benefit with a range of products, such as lights, door locks, and security systems. Those smart features have broad appeal with millennials, “who grew up on smartphones, so they’re used to being able to control things at their fingertips,” Endres says. “And they’ll pay 3 to 5 percent more for a home with the right amenities.”
Programmable thermostat. The Nest is widely recognized, but the Honeywell RTH9590WF, $300, proved easier to use in our tests. Both models can be controlled from a smartphone or computer.
Whole-house generator. Power failures are a reality for more homeowners. Stationary generators can usually power the entire property. A professionally installed unit can range from $7,000 to $15,000, according to Porch, a website connecting consumers with home service pros. The Generac 6241, $3,500, excluding installation, is a top pick.
Potential bump: 3 to 5 percent