Much real estate ink has been spilled about bathrooms and kitchens, kitchens and bathrooms!
And it’s true—they’re important to prospective buyers and renters, as people have a visceral relationship with them (pun intended).
But I wanted to go in a different direction today and look at a few other high-ROI property upgrades that homeowners and real estate investors alike can consider.
7 Upgrades to Boost Property Values & Rents
1. Finish the attic.
Have an unfinished attic? Sure, it’s useful for storing old holiday decorations and Halloween costumes. But is that really “highest and best use”?
A few stipulations to keep in mind: The attic will need a permanent staircase if it only has an old ‘70s-style pull-down. At least half the square footage must have a ceiling seven feet high or taller to be counted towards the home’s official square footage.
If low, slanted ceilings limit the space’s livability, consider adding dormer windows. Just be prepared for a higher bill, along with those higher ceilings.
2. Add new fiberglass attic insulation.
Besides being as useful as a unicycle, unfinished attics also tend to have poor insulation. While you’re at it in the attic, you have an opportunity to give your property a serious boost in energy efficiency.
Last year’s Renovation Magazine report on home improvement ROI found that the only upgrade with a positive ROI was installing new high-efficiency fiberglass attic insulation. (For some reason, they didn’t include it at all in this year’s report.)
Energy efficiency is one of those upgrades homeowners and renters alike are willing to pay more for! Especially if you can showcase some math behind the energy bill savings.
In fact, with another energy-efficient upgrade or two (e.g. a smart thermostat or similar smart home upgrade), you might even get away with marketing the property as a “green home.”
3. Add an above-garage apartment.
Along similar lines as finishing an attic is finishing (or adding) livable space above the garage.
Above-garage apartments are especially attractive for those who like the idea of house hacking, but want to live in a single-family home!
The good news is that you don’t need to mess around with the foundation, and there’s an existing footprint and walls. The bad news, of course, is you’ll need a new roof if you’re adding vertical space and a vapor barrier between the garage and the living space—plus some additional framing, drywall, wiring, and plumbing.
But with a separate entrance, its own kitchen (or kitchenette!) and bathroom, you won’t see much of your neighboring tenants.
One other perk: If you live in the property, you can probably keep it zoned as a single-family home. When you go to rent it out, you can do so as if you were renting out a room in your home.
And hey, it can always double as an in-law suite if the need arises!
4. Replace the garage and front doors.
Earlier we alluded to this year’s home improvement ROI report from Renovation Magazine. Guess what upgrade took the top slot for 2018?
If you guessed “replacement garage door,” you guessed right. It recovered 98.3% of its cost, upon the eventual sale of the property.
I found that surprising, personally. If your existing garage door looks a bit haphazard but still functions perfectly well, consider painting and other ways to spruce it up.
And third on the list? A new steel entry door. It makes for an attractive combination of aesthetic appeal and physical security. On average, it recovered 91.3% of its cost upon the property’s sale.
Remember curb appeal! First impressions matter. A lot.
5. Add manufactured stone veneer.
In keeping with the curb appeal theme, consider adding manufactured home veneer to make the property pop from the street. You don’t have to wrap the entire property; consider just adding it to the front for maximum ROI.
And stone veneer does boast strong ROI (at least relatively). If you were wondering what came in second in the Renovation report, after our discussion of first- and third-place finishers with the front-facing doors, wonder no more.
With an average return of 97.1% of its cost, stone veneer is worth considering if your property looks a bit drab or dull.
6. Add (or enclose) a deck or patio.
If your property has no outdoor living space, consider adding a deck or patio.
It doesn’t have to cost an arm or a leg, either. If you remember our friend Tim Puffer, who house hacked his first home, he built his own deck with very little experience. (Granted, he ran into trouble with the local zoning office—beware of bureaucracy!)
Outdoor living spaces extend the usable square footage of a property. Tenants and homeowners alike love them, which holds up under ROI scrutiny as well. Deck additions ranked the fourth-highest ROI home improvement, with an average cost recovery of 82.8% upon sale.
And just imagine how much higher that would be if, like Tim, you built the thing yourself!
If your property already has a deck, porch, or patio, you have some other interesting options. You can enclose the space, to whatever extent you like. That could be as simple as an awning or retractable roof in hot, sun-drenched areas where the patio or deck sees too much sun.
The next level up could be putting up a permanent roof and posts around it. Another step up may involve screening in the porch, which is especially appealing in regions with dense mosquito populations.
On the high end, you can fully enclose the space it to make it additional square footage in the home as a sun room.
More finished space, higher square footage, higher value and rents!
7. Finish the basement or laundry room.
We’ve come full circle, with adding finished, livable space in the property.
Unfinished basements can be easy or expensive to finish, with the biggest factor being ceiling height. Digging out a basement floor to lower it is often prohibitively expensive.
But if you have reasonable ceiling height, consider adding ceramic tile flooring, drywall, and wiring. For even more functionality, add a half or full bathroom.
You can even add a basement apartment with a separate entrance, as another option for house hacking a single-family home!
Laundry rooms can be especially low-hanging fruit, since they’re often semi-finished already. Consider building a closet around the washer and dryer, to hide them from sight and muffle the noise. They can make great play rooms for kids, or man-caves for men (if that term is still a thing), or she-sheds for women.
One word of caution: If you want to officially count a basement room as a bedroom, it must meet certain window requirements. There must be at least one window, no more than 44 inches from the floor, at least 20 inches wide and 24 inches tall. (Check with your local zoning office for additional state or local requirements for basement square footage to qualify.)
Always look for ways to add more curb appeal and livable space to your home or properties. Both are instant attractors to potential homebuyers or tenants sifting through listings; they grab attention and attract more inquiries.
Livable space never goes out of fashion and will continue to add value forever for your properties!