Choosing Home Improvement Projects to Maximize Home Value

By Karen Lawson
Home Worth Columnist

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No matter how much you loved your home when you bought it years ago, chances are you want to make changes now. Adding or expanding rooms, installing amenities like state-of-the-art appliances, countertops, and cabinets in the kitchen, and putting spa tubs in your bathrooms can enhance your enjoyment of your home and add value. How do you know which improvements are good choices for increasing the worth of your home?  By choosing high-value improvements, selecting an expert contractor, and shopping for the best deal in financing.

Home Improvement: Choose Projects that Add Value
Real estate professionals can offer tips about home features popular among potential buyers in your area. Some additions add more value in different locations. For example, building a deck in a temperate climate like Hawaii or Southern California is a good bet. Dwellers in cities like San Francisco prefer family room additions, and these investments have generally returned more than their cost--approximately 140% in fact. If you're selling your home, it's smart to choose improvements designed to please potential buyers. If you're not selling soon, you need only please yourself. Or strike a balance between projects tailored to your preferences and those desired by potential buyers to add home value.

Getting Help with Home Value Estimates
The best way to ensure that an improvement truly adds value is to choose a contractor who will deliver quality work and do it on time. Get references (a trusted real estate agent is a good source), check with your state's contractor licensing board, and inspect other work the builders have performed. Get several estimates and spend some time speaking to each contractor. Builders are running out of work in many locations due to soft real estate markets. Now could be a great time to get high quality work and save money too.

Home Value and Financing Options
Once you know what your project is going to cost and how long it will take, check into financing. A home equity line of credit (HELOC) can be a great option once you've determined how much you'll need to spend. You can draw against home equity to pay for supplies and labor as needed. Although a HELOC may work like a checking account, it increases the mortgage lien against your home each time you use it. Knowing your current home value, how much home equity you have available to pay for improvements, and getting an estimate of your home value when remodeling is completed can help you plan successful home improvement projects.

About the Author
Karen Lawson is a freelance writer with extensive experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.