If you’re considering refinancing your home anytime soon, it’s a good idea to look into adding equity to your home’s value with one or more of the home improvement projects listed below:
Add a Man Cave
What we knew as “rec rooms” just a few decades ago have been re-purposed to the now-familiar “man cave” of the 21st Century, an in-home hang-out for the man of the house and an increasingly popular trend among home buyers. As more and more homeowners rush to add a hi-tech man cave to the basement, garage, or bonus room of their homes, their reasons for doing so aren’t all hedonistic.
The bump up in home value that a man cave carries with it can also make the case for refinancing your mortgage at a lower rate,. In fact, adding a man cave is just one of several low cost home improvements that appeal to prospective home buyers and maximize the home’s value when it’s time to refinance.
Surprisingly, home buyers want to see the man cave in place rather than install it themselves, since the perception that installing one would be expensive. And the bigger, the better. Must-haves in any respectable man cave include a bar, massive flat screen TV, pool table, lounge chairs and any additional accouterments that appeals to the resident man. An impressive man cave can be furnished for as little as $5,000—even less if you bargain hunt for electronics.
Adding a room on to your home can significantly boost its equity value and give you more living space to boot! Consider what another room would best be used for before you start having blueprints drawn up to make sure your addition provides the biggest return on your investment. For example, if you have a two-bedroom home, adding a third bedroom is probably the way to go in order to guarantee a top ROI. If you don’t need another bedroom, consider adding another bath to boost your home’s value and to make the morning routine just that much easier. Home buyers can’t have a big enough kitchen, so expanding your existing kitchen can add functionality and the potential for a bidding war when you decide to sell the home. Make sure the space you choose for an add-on translates to heightened buyer interest in case you do decide to sell down the road.
If your home already has a garage, the basic value is there. Now, making improvements to the garage is another way of adding value to your home. You might want to consider expanding your single-car garage to a two-vehicle option with a dedicated workspace, shelves and cabinets. You may even want to consider redesigning the garage to give it a completely new function, such as a man cave or children’s playroom. In fact, if you don’t have a garage at all, it would be a worthwhile investment in your home’s functionality as well as its equity. Building a garage is a relatively expensive and time-consuming project. Make sure the addition of a garage does not push your home’s value too far above the range of comparable value properties in your area, since it could work against you if you decide to refinance or sell.
Take the Indoors Outside
Take advantage of your home’s outdoor space by making it into outdoor living space, an extremely popular trend that is less expensive and time consuming than adding an interior room or remodeling. You can create almost any type of outdoor living space to suit the way you plan to use it. Outdoor kitchens, for instance, have replaced the backyard barbecue with large spaces for entertaining, outdoor fireplaces or fire pits, bench searing, outdoor televisions and other features that can become the major selling point of a home.
Even a simple deck or patio added to the backyard space, or a landscaping facelift can add value to your home when it comes time to sell or refinance.
When you’re preparing your house for refinancing, it’s important to know what an appraiser is looking for. The number one thing that’s going to add value to your home is increasing the overall square footage of your home, increasing your lot size if possible, and increasing the number of rooms in your house.
Appraisers also take into consideration the overall condition of a home to make sure there are no major structural defects or damage. Making sure that things like the roof, the foundation, windows, electrical systems and plumbing are in good working order is critical to getting the best appraisal possible.
Make sure that the appraiser takes notice of any improvements you’ve made to the home. In general, appraisals are more about structure than cosmetics, so you should have a list ready of all the upgrades you’ve made to make sure you get the credit you deserve.