Budget, Budget, Budget: Make a budget and STICK TO IT. The point is to increase your home value by more than you spend on the project. Take your projected new value, half it, and use that as your starting base. Then add 15% to that number and you have your budget!
Understand how much your home price can increase: Home prices are tied to the neighborhood you live in and the current housing market. Research other homes in your market and determine the maximum price a home will realistically sell for in your area. Don’t plan on your new home value being any higher than that.
Work with a professional:
- A real estate agent will be able to help you understand how much a renovation project will add to your home value.
- If your renovation entails electrical or plumbing components, you may need to have the work performed by a certified professional.
- Any construction projects should be done by a licensed contractor who understands building codes and can insure the work.
- When you make significant changes to your home, you must tell your insurance agent or risk having gaps in your home owners coverage.