All homeowners want to see the value of their home increase as the years go by. How much a home appreciates over time, and whether its resale value rises at all, depends on many factors. Some of the things that increase a property’s worth are in the owner’s control, such as home improvements and other efforts that enhance a home’s curb appeal. But other elements that affect home value are changes in circumstances and buyer preferences that an owner can do little about.
Whether you are looking to buy a new home or want to better position your existing house for resale, here are ten factors that increase home value, divided between eight that homeowners can do something about and two external forces that will impact a home’s worth.
Home Improvements That Provide The Best Return On Investment
Increasing a home’s value through enhancements and improvements won’t mean much to an owner if they have to spend significantly more on making those improvements than the value they add. That is why looking at a given improvement’s return on investment (ROI) is so important. Calculating the ROI of a given improvement involves determining how much in costs you recover after comparing the expense to the amount it adds to the sale price. The higher percentage of costs recouped means a higher ROI.
The following home improvements that increase a home’s value offer the best ROI:
- Minor bathroom remodel: 102 percent average return at resale
- Landscaping improvements: 100 percent average return at resale
- Minor kitchen remodel: 98.5 percent average return at resale
- Exterior improvements (e.g., paint, siding, front entry): 95.5 percent average return at resale
- Attic bedroom conversion: 93.5 percent average return at resale
- Major bathroom remodel: 93.2 percent average return at resale
- Major kitchen remodel: 91 percent average return at resale
- Deck, porch, or patio addition: 90.3 percent average return at resale
Two External Factors That Increase Home Value
While owners can control what happens on and to their property, they can also be somewhat at the mercy of what happens around their home and to the preferences of buyers. According to Zillow, two of the most significant external factors that impact home value are:
- Proximity to a Starbucks. Between 1997 and 2014, homes located within a quarter-mile of a Starbucks rose in value by an average of 96 percent, compared to a 65 percent increase in value for all homes in the U.S.
- Proximity to a city center. City living is increasingly attractive to home buyers, which bodes well for Chicago homes. The average urban home is now worth 35 percent more than the average suburban home, with median home values in urban areas increasing by 54 percent since 2012. That is significantly more than the 38 percent median home value increase in suburban areas.
If you plan on selling your Chicago home or condo in the near future and want to make improvements before listing, contact us about Compass Concierge. We can help you make the choices that will add the most value and bring you the best return on your investment.