How To “Force” Your Home’s Value Upward

Now that you’ve purchased that home or rental property that you’ve spent weeks (or months) identifying, you’re ready to begin the renovation process.

You should have already identified a contractor that you want to work with. Your property would have already been appraised (if you used conventional lending) and you should have a copy of the appraisal report that you should read to get a better idea of why your property was valued at the amount that it was, or you could also contact the appraiser and ask a list of prepared questions on their rationale for valuing the property for that amount.

The appraiser is the best source for figuring out how to add the most value to a specific property during the renovation process. This is because they evaluated comparable properties nearby and have the best idea of what will work best for you and your home when trying to appraise your property later down the road.

However, there are some basic rules to every renovation that adds value to any house when done right. No matter the condition of the home, or the type of home, these renovations will immediately add value and view the home favorably when appraisal time comes around.

Below are some simple fixes to immediately add value to your home:

1. Update any old appliances—If the appliances are in decent shape, you can skip this step. If they are falling apart or rusted, or obviously very old to the point where they’re embarrassing to display, consider buying stainless steel appliances. You don’t need to purchase all new appliances. So long as they are in good shape and functional, you can purchase used appliances. People are giving away appliances for cheap all the time. There are numerous websites, including Facebook Marketplace, where people sell appliances for a fraction of the price it would cost you to buy new ones. I always replace the dishwasher in new rentals, just because tenants appreciate it. Consider appliances with Energy Star ratings; they cost a bit more, but they will reduce energy costs in the long run. Appraisers view energy-saving appliances favorably. 
2. Update any old fixtures—Whichever material you decide to use for this renovation, just make sure that you are consistent throughout. I prefer to use all brushed nickel fixtures even though it can be slightly more expensive than chrome or brass. Trends change and so does what people like to see in homes. You shouldn’t focus too much on this, just pick what looks nice and be consistent with it in every bathroom/room in your house.
3. Replace lightbulbs with high-efficiency LED bulbs—Tenants will appreciate that you took the time to consider their energy savings and costs. LED bulbs are not at all expensive and they cost sometimes $1-2 to operate annually. People forget and leave lights on all the time. If you’re working to keep your tenant’s energy bill down they will be more likely to stay longer, and even pay higher rents.
4. Paint every room in the house (and even the outside of the home)—Consistency is important. For this reason, I always paint the rooms in my rentals the same color throughout, and I also use the same flooring in every room as well. I use similar fixtures in all the bathrooms. I usually go for a neutral silver-gray color for the walls, with gray flooring and glossy white baseboards. It is not an extravagant color that will induce any kind of mood in people, and if the tenant doesn’t like it they can paint the house so long as they paint it back to the color they found it in.
5. Replace old carpets—Carpets are cheap to replace. I prefer to get rid of carpets altogether and install vinyl flooring. If this is not an option for you, replacing the carpets makes more sense and gets any odors out. As a general rule, I never keep old carpeting in my rentals unless it is new carpeting and there is no smell. I’ll still have the carpet steam washed and attended to. If there were any pets living in the home prior to when I bought it then I will always replace the carpeting. 
6. Lawn care—Attending to dead grass and plants will go a long way with curb appeal. Consider hiring an arborist or even doing the work yourself.

Below are some fixes that are pricier but will add more value to your home in the long run:

1. Large renovations of bathrooms—Bathrooms and kitchens sell homes, and every appraiser and investor will agree to that. Some low-cost solutions are new toilets, new vanities, and glazing an old bathtub. If you have a higher budget, consider new tiles. It is a wise idea to spend more money on tile in bathrooms because you will only need to cover a small amount for square footage, giving you the most bang for your buck. Once again, stick to neutral colors when renovating bathrooms.
2. Kitchen renovations—Kitchen renovations can get expensive fast, but they are well worth the money. There are ways to keep costs down, however. If the cabinets are in good shape, consider refacing them instead of replacing them. Consider replacing vinyl countertops with granite. Changing the fixtures is also a great option, as well as changing the cabinet handles if they are old and worn. These simple and low-cost renovations will positively impact the value of your home.
3. All new flooring—Replacing carpets with something longer lasting like vinyl flooring will always add value to your home. The price of vinyl flooring ranges from as low as 70 cents a square foot to upwards of $5 dollars a square foot. From my experience, cheaper vinyl flooring is fine so long as it is properly installed and well maintained. Many vinyl manufacturers offer a lifetime warranty and the flooring is completely waterproof, unlike laminate flooring. I always go with an unobtrusive color and always install vinyl flooring in all my rental properties as well as my primary residence. It is easy to clean, easy to maintain, and easy to install, and it can be bought for cheap!
4. Bedroom and bathroom additions—If the house has the extra square footage, consider using the space to add an extra bedroom. If the plumbing is there, consider adding a bathroom as well. Laundry rooms are good for this. You get much more value in your home if you convert a laundry room into a bathroom. Besides the 3-inch pipe necessary for a toilet, the plumbing is already there and will simply need to be modified. This is much easier done in homes with crawlspaces, as homes with slabs will need to be carved in order to access the plumbing and build the new pipes. However, it can be done, and I’ve had contractors do it in order to add an additional bath to the home. Rooms are much easier to do, as you will only need structural and electrical work done. Converting bonus rooms, porches or garages will require ductwork (and other items depending on your county) in order to be counted as rooms and have the square footage of the addition counted towards the total square footage of the home. This can be done by utilizing a nearby vent and simply expanding it into the new room.
5. New doors and windows—Hurricane impact and energy-saving windows work great when replacing older windows. Some homes were built in the 1930s (or even older) and still have their original windows! It will modernize the house, keep energy costs down, and provide for a cozier living environment for either you or your tenants.
6. New AC condenser and air handler—AC units can last for decades if maintained properly. Make sure the AC unit is the right size for your house. Sometimes with older houses, the ductwork will also need to be attended to. In some cases, you will only need to replace the condenser and air handler if the ductwork is still in great shape. Newer AC units are much more energy efficient than older units from decades ago.
7. New roof—If the roof is 20 years old or older, consider replacing it, even if there are no leaks. A new roof will also provide energy savings if properly installed, as less heat will get through into the home. A new roof goes without much explanation. Decide on the kind of material you want for your roof. Basic shingles are the most common and work just fine and depending on where the property is located, will last you two decades or more.

Whenever you are planning a renovation, if the renovation is for a rental property, speak to the appraiser about any potential renovations. Unless it is your dream home, your goal is to maximize your profit and get the most bang for your buck while at the same time making sure the property looks decent and is a safe place for someone to live. 

Other renovations that I didn’t mention above include boilers, showers, and stoves. Really, anything that you can update, modernize, or make better and more efficient, will add value to the home. For rental properties, you need not go above and beyond in the renovation process. Simply updating what is already there with newer materials, even if those materials are on the cheaper end, will greatly add value to the house.

Consider reading Brandon Turner’s The Book on Investing In Real Estate with No (and Low) Money Down for a more detailed analysis of what you can do to increase your home’s value.

Any other ideas I didn’t mention in this article? Feel free to comment below or visit my social media pages and let me know! I’m always open to new ideas.