How to Measure Value in a Home
Every feature of a home holds value, both from an appraisal perspective and a market perspective, including things like lot size, location, view, square footage, condition, finishes, fireplaces, and systems.
One of the most common questions I get from homeowners is, “How can I best add value to my home?” This is a great question, and the answer isn’t black and white. Some improvements add lasting value, while others add more temporary benefits. Surprisingly, both can be beneficial depending on your long-term goals as a homeowner.
Lasting Value
Natural light, for example, is a change that adds long-term value. Adding windows, expanding them, incorporating doors to outdoor spaces, or removing walls to create a more open feel—all of these changes increase a home’s appeal in ways that last. Projects like these usually offer a dollar-for-dollar return on investment, if not more, and they’ll stand the test of time.
Temporary Value
Then, there are trends, which add short-term appeal but may not last forever. Take wallpaper—it’s back! And for years, “Agreeable Gray” was the go-to paint color in new builds, though warmer tones are already taking over. Updates like fresh paint, new flooring, light fixtures, or cabinet hardware can make a big impact on a home’s short-term value. They’re also relatively quick and affordable and can yield a strong return if you plan to sell soon.
On the Spectrum
Most upgrades fall somewhere between temporary and enduring value. Renovating a kitchen or finishing a basement are good examples. A beautifully updated kitchen might not yield you top-dollar simply because you chose high-end finishes, surrounding homes have an impact on your home. And a finished basement—especially if it’s at a higher quality than the main levels—may not yield as much return as you expect. Square footage above grade is valued much higher than basement space, so there’s a cap on what you can recoup. The same holds true for outdoor spaces—Colorado living makes outdoor spaces a big draw, but factors like size, orientation, and location can limit how much value you can add.
Establish Clear Expectations
Ultimately, it’s all about expectations. If you approach upgrades with realistic expectations, you’ll be happy with your decisions. Make the upgrades that matter most to you. If a chef’s kitchen with all the bells and whistles is what you want, then create it! While it may not return every dollar spent, the enjoyment it adds to your life is invaluable. Conversely, if you’re upgrading solely to add value before selling, let’s strategize to ensure you’re investing in ways that yield the best return.
So, before you dive into any major project with resale in mind, reach out. Together, we can devise a strategy that aligns with your goals, timeline, and budget to make sure you’re getting the most value for your investment.