What Adds More Value to Your Home: Indoor or Outdoor Upgrades?
If you’re looking to increase the value of your home, either to sell it soon or to simply start building its value for a later date, you may wonder which types of upgrades will add the most value, indoors or outdoors?
The short answer is that it depends, according to experts, but here are some tips to think about for either option.
The pandemic changed all of our lives in many ways, and that may play a role in the importance of outdoor home upgrades, says Gary Grewal, financial planner and author of “Financial Fives.”
“With so many working from home and the pandemic pushing people outdoors, many people have grown accustomed to dining, exercising, working and entertaining outdoors. Backyards are becoming the new centers of attention for homeowners.”
First impressions definitely matter when prospective buyers or appraisers are coming to look at your home. “Curb appeal goes a long way and should in no way be ignored when looking to upgrade your home for resale,” says Betsy Moyer, co-founder and owner of the interior design blog, “The Estate of Things.”
Focus on Small Upgrades
However, the upgrades that will add value to your home can be very specific to the local market, says Michele Harrington, chief operating officer of First Team Real Estate. “If you’re ready to sell in the immediate future, any large-scale upgrades, inside or out, won’t be a good idea because chances are you won’t get 100 percent or more ROI.”
Small-scale outdoor upgrades can bring the biggest value, she says. This includes a new front door, a new garage door, and fresh landscaping.
Moyer agrees that simple outdoor upgrades are the best place to start. “Like cleaning and clearing out overgrown brush to change the appeal of your home. Other simple outdoor upgrades that make a huge difference include giving your home a new inviting face for potential buyers’ first impressions. Don’t forget to paint your front door a welcoming hue…we recommend a sunny yellow, classic red, or watery blue,” Moyer adds. If you want to take it up a notch, you can consider adding a porch swing, outdoor seating or enclosed porch.
Minor outdoors improvements are a great place to start because they don’t cost that much and will actually increase the resale value of your home by five percent. You can start with replacing a garage door, fixing any broken siding, and paying for exterior house cleaning–which can increase the value of a home as much as $10,000 to $15,000.
If you’re able to spend a little bit more, Justin Goldman, CEO and co-founder of RenoFi, which provides renovation financing, says that decks and patios are a good next step. “These are lower cost compared to bathrooms and kitchens–around $10,000 to $30,000–depending on size, material and complexity, but generally provide a great ROI.”
While outdoors may be getting the most attention, there are some significant indoor upgrades that will make a huge difference to a prospective buyer.
Focus on Kitchens and Bathrooms
“On the interior, the key to a buyer’s heart is in a kitchen upgrade,” says Moyer. “80 percent of homebuyers say they’d prefer a move-in ready home over one that needs work. Even if it’s a minor refresh, we can’t recommend enough that you put a little effort into modernizing the heart of the home.” She recommends changing out cabinets replacing faucets and hardware, painting and changing out lighting.
Now, a kitchen remodel is not going to be cheap. A total remodel can cost anywhere from $70,000 to $100,000 according to Goldman, but it’s worth it if you aren’t in a hurry to sell.
Other than kitchens, upgrading a bathroom is key, according to James Chapman, director at Bella Bathrooms. “A modern and stylish bathroom attracts potential buyers. Replace outdated plumbing and lighting fixtures and make sure everything works well. Repair issues such as water leakage. Paint it with neutral colors for a fresh clean look.”
“Minor bathroom and kitchen remodels offer the highest average return at resale,” says Andrew Latham, a certified personal finance counselor and director of content at SuperMoney.com. “If you still have money left, try to create additional living space for your home by converting an attic or a basement into a bedroom or recreation room.”
Whether you make indoor or outdoor upgrades, keep in mind that most renovations only bring about a 70% return on investment (ROI), says Goldman, which provides renovation financing. “You should not necessarily expect to turn a profit or make money on your home improvements. And I can’t pick either indoor or outdoor improvements and say which one will increase home value. It really depends on the project and the real estate market that you live in,” Goldman adds.
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