When you’re ready to sell your home, you want to get the best price for it. Often, that means ensuring the home is in tiptop shape before you list it. Home renovations can be expensive, though, so how do you get your home looking gorgeous without costing an arm and a leg?
Apply for a Loan
Paying for renovations out of pocket could mean waiting a lot longer to sell your home. If you get a loan, however, you can make the necessary improvements more quickly and get the house on the market. Once the house sells, you can then use some of the profit to pay back the loan. There are many loan options to choose from, such as a Home Equity Line of Credit (HELOC), a home equity loan, or a refinance. Generally, it is preferable to use a HELOC, over a refinance or equity loan because the fees involved in a refinance/equity loan would probably be prohibitive. Home equity loans put a lien against your home and provide a single lump sum and charge you interest against the entire amount. A HELOC gives you a “checkbook” or Creditcard with a total spending limit but only charges you interest against the amount you actually use. According to Investopedia, “Home equity loans usually aren’t the answer if you only need a small infusion of cash. While some lenders will extend loans for $10,000, many won’t give you one for less than $35,000. What’s more, you have to pay many of the same closing costs associated with a first mortgage, such as loan-processing fees, origination fees, appraisal fees, and recording fees… Unlike home equity loans, [HELOCS] tend to have few, if any, closing costs, and they usually feature variable interest rates—though some lenders offer fixed rates for a certain number of years.”
Do It Yourself Where You Can
Paying someone else to do your home improvements is going to make them more expensive. There are many renovations you can do yourself without any outside assistance at all. Consider tackling such jobs as painting, wallpapering, swapping out fixtures, and other relatively simple jobs yourself to save money.
Keep It Simple
You don’t need to build an addition or make other enormous changes to renovate your home. Consider keeping your improvements simple in order to complete them more quickly. Try refreshing cabinets instead of replacing them. Upgrade fixtures and hardware. Think more about appearances over function and remember that buyers are likely to make their own changes anyway. Don’t spend money on expensive things that a buyer is very likely to change.
Focus on the Most Profitable Improvements
There may be lots of things you notice you could do, but not all of them will really give you a return on your investment. Instead, focus on the most profitable renovations:
- painting
- yard landscaping
- bathroom updates
- flooring
- lighting updates
Not only are these the most profitable improvements, but they’re also ones that you can generally do yourself if you’re a little handy.
The right home renovations can help you make significantly more money on the sale of your home. While it does cost some time and money to make these improvements, you’ll see the return on your investment in the form of more interest in the home and better offers from potential buyers. Done right, you can end up making back the money you invested in the renovations and more.
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