Home upgrades can certainly increase the value of your home, but you have to make sure that remodel aligns with your budget first. Doing your research on which types of upgrades will give you the best return on your investment can help you make the right decision and prioritize the home renovations you want to invest in. After all, home improvements take money and time—so make sure you're making a worthwhile use of both.
Sometimes, a simple paint upgrade is all it takes to freshen up a space in your home and increase its value. "You could paint your front door, add new house numbers, buy a new doormat, and even replace your mailbox if yours is outdated," says Tyler Forte, CEO of Felix Homes, an online home buying and selling platform.
Of course, envisioning home renovations can be exciting, but you have to figure out how to fund them, too. Whether you have money saved or are looking to take a loan, here are expert tips on how to find funding for your home upgrades and prioritize according to your budget.
Determine whether the project is a good investment.
Some renos start paying off right away: Outfitting your house with Energy Star appliances (washer, dryer, water heater) can cut your energy use and slash your bills significantly. Other upgrades might not save you money in the near future, but will help you fetch a higher price when you eventually sell.
"Anything that gives your house more curb appeal can really boost its value—and help you enjoy your home more while you're living there," says Sarah Feezor, a real estate agent with Dream Town Realty in Chicago. Buyers searching online might scroll past a listing with peeling paint or a dilapidated porch before looking at interior photos. In fact, the 2021 Cost vs. Value Report by Hanley Wood, a residential data provider, found that curb-appeal projects, including changes to siding, doors, and windows had an average payback of 68 percent, compared with about 55 percent for interior upgrades such as a midrange primary suite addition.
Inside, kitchen and bathroom renos get the most return on investment. Even so, you'll want your spending to be compatible with the house's total worth—a $90,000 kitchen remodel doesn't make much sense for a $200,000 property. "One of the worst things people can do is over-improve their homes," says Feezor. "If the upgrade means you're now the best house on the block, you're never going to get as much of your money back when you sell." Checking out comparable listings in your area can help you keep pace with—but not exceed—the local market.
Related: 4 Neutral Paint Colors That Can Add Value to Your Home
Make a budget before borrowing.
You probably have a gut sense of whether you want to spend $5,000 or $50,000 on that kitchen renovation. To turn your ballpark estimate into a budget, first browse home improvement stores and sites for an idea of which materials and fixtures you like and how much they'll cost. For smaller projects, lean on sales associates to walk you through your options and answer questions. For larger upgrades, spending a bit up front for a design consultation can get you valuable info about your options and help ensure every necessary item makes it into your budget.
A good rule of thumb is to pad contractor estimates by 10 percent. With a DIY project, pad the estimate by 20 to 30 percent, because hiccups happen—especially when you're not a pro. For city-by-city estimates on typical costs, use this Real Remodeling Costs tool by Houzz.
Related: Luxe Design Ideas for an Expensive-Looking Kitchen (on a Budget)
Smart home renovations can turn out to be a great investment, proving to be worth all the money you put in. However, not everyone has thousands of dollars saved to remodel the kitchen or upgrade that half bath. That's where personal loans come in. A Discover personal loan offers up to $35,000 to cover your project costs, fixed interest rates, flexible repayment terms, it's unsecured and funds can be sent as early as the next business day after acceptance—so you can stay on top of your finances while investing in your dream home. Discover makes loans without regard to race, color, religion, national origin, sex, handicap, or familial status. Sponsored by Discover Personal Loans
Use credit card offers to float smaller projects...