Most homebuyers dream of moving into a turn-key home that doesn’t need repairs or upgrades. But if you have a limited budget, you may not be able to afford a home that’s completely renovated. As you’re shopping for a house or deciding what upgrades to make in your new place, it’s important to prioritize so you can stay on budget. To help you decide which repairs to make first, here are top home upgrades to consider as you buy or renovate a home.
How to prioritize repairs and upgrades
Although updated, modern finishes are nice to have, they’re not essential. When planning your renovation, you should first consider repairs and upgrades that will improve the safety and structural integrity of your home. For example, if your house has an aging roof, electrical problems, or a cracked foundation, it’s important to prioritize those repairs over cosmetic updates that are less pressing.
Buyers should also look for properties that have newer home systems. Systems like water heaters, air conditioning, and electrical panels can be expensive to replace. Finding a house that doesn’t have major mechanical problems will save you lots of money in repair costs.
But if you fall in love with a home that has an aging system, you can calculate what it will cost to repair or replace and consider asking the seller to purchase a home warranty to reduce your out-of-pocket costs.
If you have money left over after taking care of mechanical and structural repairs, you can start to make cosmetic improvements to your home. Simple projects like replacing outdated light fixtures, painting, and replacing old flooring can bring your house up-to-date and increase its value.
But before you tackle a large-scale renovation or buy a home with high-end finishes, it’s important to make sure you’ll get a return on your investment. Talking to a real estate agent can help you determine if the project or house you’re considering is worth the cost.
What home upgrades to consider as you buy
Buying a home that needs some work is a great way to save money. Fixer-uppers tend to be less expensive than turn-key homes and allow you to build equity as you make improvements. But if you want to get the highest return on your investment, you’ll need to be strategic about which home improvement projects you take on.
More profitable repairs and upgrades
Upgrading major home systems like heating systems and water heaters can be expensive, but will get you a high return on your investment and make your home easier to sell in the future. Replacing your roof, for example, could get you as much as a 109% return.
When it comes to cosmetic updates, some projects may add more value to your home than others. Renovations that improve both the visual appeal and functionality of your home, such as replacing your garage door or updating your kitchen, will usually build the most equity. A minor kitchen remodel can get you an 80.5% return, while replacing your garage door may get you a near-total return of 97.5%.
Less profitable repairs and upgrades
Making improvements that are viewed by homebuyers as less essential, like adding a pool or a sunroom, may not increase the value of your home very much. It could even be less expensive to buy a home with the extra features you want than to add them yourself. Building an in-ground pool can cost $65,000 or more and may only increase your home’s value by 7%. So before you consider premium features like pools, game rooms, or luxury finishes, it’s important to determine if buyers in your area would be willing to pay more for them. Otherwise, you could end up losing money.
Put needs over wants
When buying or renovating a home, it’s important to prioritize needs over wants. Problems that could damage your home or pose a safety risk, like a leaky roof or faulty wiring, should be fixed first. Consider replacing aging home systems before making cosmetic updates as they may get you a higher return on your investment. And before you take on a major renovation, make sure it will be worth the cost. Adding luxury finishes or premium features like a pool may not make financial sense depending on your home’s price point and location.
As always, our team at OVM is here to answer any questions you have and help guide you through the process, whether you’re buying a turn-key home or a fixer-upper! Give us a call or start your online application today.