How to Increase Your Home's Value

Whether or not you are planning to sell your home (not a great idea in the current market) it is always wise to treat it as an investment. When you plan home improvements you should consider the Return On Investment (ROI) of each project and try to avoid those that provide little or no return. Of course, if the project is a repair there's no question you should go ahead with it but most renovation projects are done by choice, not out of necessity.

Real estate agents can provide you with the best advice but there are some simple rules concerning your home's value:

• Curb Appeal: Easily the most important if you are considering selling. People won't even look inside if the outside does not look as if it has been maintained. If they do venture inside they'll be thinking of a "low ball" price; not the place any seller wants to be!
• Kitchen: A new kitchen typically returns two dollars at resale time for every dollar you spend. Why? Just look at potential buyers' behaviour when they visit your house. The first place everyone goes is to the kitchen. If you can "wow" people here then half the selling job is done.
• Bathrooms: Like kitchens, bathroom renovations also pay off handsomely. These are the second most frequented spaces in your house and are the next place buyers look. The reason kitchens and bathrooms are high on buyers' lists are because they're the most expensive to renovate. If they're going to buy your house they don't want to invest thousands more afterwards to get what they want.
• Decorating: Paint and flooring are fairly inexpensive renovations that add value to your home. A good paint job can be easily by most people but get a professional to install new flooring. Nothing ruins the investment you've made on flooring more than a poor installation.

Your decision to carry out other types of projects should be based upon whether or not you plan to sell the house in the immediate future. If so, the rule of thumb here is, if you can't see it don't spend money on it. For example, replacing wiring or plumbing in an old house is an expensive job that won't pay off when you sell because people will see it as repair work.

If you are planning to stay in your home then there is another type of project that should percolate to the top of your list. Projects that generate savings in your operating costs will do little for resale value but will pay off over the long run. For example, doors and windows, attic insulation, upgrading your furnace to a high-efficiency model all take about 10 years to generate ROI.

Finally, there are the projects that are "wants" rather than "needs". They are modifications to your home that are unlikely to generate ROI but improve the living environment. Some examples are basement renovations, changes to floor plans and backyard decks and landscaping. Many people see these types of projects as good investments but they are unlikely to induce a potential buyer to value your home higher than a similar home down the block.

The most important factor in all these projects is ensuring they are done properly. If you undertake an ROI project before a sale and the result looks bad then you will have lowered your home's value. Similarly, a badly-executed project you expect to live with for many years will be a nagging annoyance when you have to look at it every day.

Do your homework if you want to ensure the result measures up to your expectations.