With the current competitive market, many homeowners may be looking for opportunities to give their homes a facelift, rather than selling right away. Both home improvement and maintenance spending are expected to increase over the next year, which could give homeowners the chance to boost their home equity.
Equity is the difference between your home’s appraised value and your outstanding mortgage balance. For example, if your home is worth $400,000 and you owe $150,000 on your mortgage, you’d have $250,000 in equity.
There are several ways you could increase your equity over time — one route is by paying down your mortgage. Another is by putting money into your home in ways that could add more value. Below, we highlight some ways to accomplish this without busting your budget.
Invest in your landscaping
Since your home’s first impression is likely to be determined by your yard, it’s important to spruce up your curb appeal through landscaping. Perhaps your yard needs some pops of color — in that case, installing blooming trees, plants and flowers is a viable option.
If you do it yourself you can save on some of the costs, but it could be worth hiring professionals. Plant installation can range from $1,331 and $5,646, according to HomeAdvisor, though the job costs $3,370 on average. You can add grass, vibrant flowers, shrubbery and maybe a few extra trees to liven things up out front.
Upgrade your flooring
If you’d like to get rid of a worn-out carpet or dated tiling, consider replacing your flooring. Hardwood floors are not only a popular option among many homebuyers, they could add more equity to your home beyond the installation cost. Homeowners recover 106 percent of the value of a wood flooring project, according to a remodeling impact report from the National Association of Realtors.
It could cost around $8,000 to install hardwood floors on 1,000 square feet, HomeAdvisor estimates. Laminate flooring — for those on a tighter budget — in that same amount of space would cost about $5,550. Keep in mind that laminate floors can’t be refinished or sanded, however.
Repaint your interior
There’s nothing like a fresh coat of paint to breathe new life into a space. Repainting your entire interior could cost you anywhere from $2,000 to $9,000 for a 2,500-square-foot home, reports HomeAdvisor. Each interior wall you paint may cost you as low as $100 each, but if you plan to add some accent walls throughout your house, you can expect to pay 20 percent to 30 percent more per wall, according to HomeAdvisor.
Replace your light fixtures
Setting aside funds to swap out your light fixtures can help you add more character to your home, as well as give potential homebuyers another visually appealing feature to consider when you’re ready to sell. HomeAdvisor estimates the average cost to install an individual light fixture at $523. No-frills fixtures may start at a $75 price point, while chandeliers and the like can go as high as $2,200.
Pendant lights can range from $95 to $250 each; recessed lighting fixtures fall within a $125 to $230 range.
The bottom line? You don’t have to spend a fortune to increase your home’s value. More equity could give you access to the funds you want to reach other financial goals, such as starting a real estate investment portfolio or consolidating high-interest-rate debt.