AAA House Manager's Ultimate Guide to Maximizing Home Value©
Home ownership is a long, meandering journey full of twists and turns — some expected, some not. Wherever you are in your journey, one thing will always remain key: your home's value. It’s the sort of detail that easily gets forgotten in the hustle and bustle of everyday life — until it’s time to sell. But, building your home’s value slowly over time will end up being a better investment than rushing to do repairs and renovations in anticipation of a sale.
In this guide, we’ll cover the key strategies that may help increase your home’s value. We’ll start with maintenance and repairs, since they can have the biggest impact on your home’s value. Then we’ll look at the most popular renovations and their potential return on investment. Spoiler alert: some upgrades actually bring valuations down! Then, we’ll wrap things up with some quick and easy tips you can get started with today.
Let’s get started!
Table of Contents
- Job Opportunities
- Neighborhood Comps
- Home Condition
- Adding a Bedroom
- Creating an Open Floor Plan
- Updating an Outdated Kitchen
- Renovating an Outdated Bathroom
- Converting Your Basement
- Master Suite Additions
- Universal Bathroom Remodels
- Major Kitchen Remodels
- Garage Additions
- Swimming Pools
- Anything Overly Personalized
- Removing a Closet to Make a Bedroom Bigger
- Bedroom to Office Renovations
- Garage Conversions
- Hot Tubs or Above Ground Pools
- Fancy Additions
- Costly Landscaping
The content provided in this home guide is for informational purposes only and is not intended to be financial or real estate advice. Each home is unique, so always do your own research when considering home improvements or other ways to increase the value of your home.
Chapter 1: Home Valuation 101
Let’s start with a look at some of the factors that influence your home’s value. Aside from the age and size of your home, there are six contributors — some within your control, some not — that will go into determining the amount you’ll be able to get for the sale of your home.
Location is one of the most important factors in your home’s value. A house in fair condition that’s located in a great neighborhood is often worth more than a pristine home in a less desirable neighborhood. Remember supply and demand from econ class? It’s the same concept here. If a lot of people want to live in a particular area, prices are going to rise. Then there's proximity to sought after features such as shopping districts or highways, which will both support a higher valuation.¹
School districts have a direct impact on the desirability of neighborhoods. Areas with great schools are sought after and tend to have higher home values.² Whether or not you have school age children, keep an eye on the ratings of local schools through sites like school-ratings.com, greatschools.org or schooldigger.com. You may see home values fluctuate, to some extent, with the increase or decrease of a school’s rating.
Another factor that impacts a location’s desirability is career prospects. Areas with little access to good jobs will see young people leave in search of work opportunities. On the other hand, neighborhoods in or near large cities and business centers will be in higher demand.¹
Likely the most accurate indicator (and biggest influencer) of your home’s value is the amount similar homes in your neighborhood have sold for. Real Estate sites like zillow.com track sales in your area and can give you an idea of your home’s value. Your bank or mortgage company may also send occasional updates, or you can speak with your Realtor to get firsthand insight into what they’re seeing in the local market. Of course, it’s not an exact science. Tour open houses in your neighborhood to follow renovation trends and see how the condition of your home stacks up against others that may someday be your competition in the market.¹
The history of your home and neighborhood also plays a part in the price buyers will be willing to pay. Crime rates (even in a neighborhood that has been gentrified) can negatively impact your home's valuation. On the flip side, areas with historical significance or a distinctive architectural style can command higher prices due to their importance in local culture and history.³
Here’s where you have the most control of your home’s value. You’ve likely heard the term “move-in-ready.” The majority of buyers want to unpack their boxes and settle in immediately — and they’ll pay top dollar for that luxury. Every repair, replacement, upgrade or update that’s needed in your home will take dollars off the sale price. On the flip side, work that’s completed ahead of hitting the market will help get the most amount possible at closing.¹ We’ll get into this more in the next chapter.
Chapter 2: Maintenance & Repairs
Now that we have a better understanding of how home prices are determined, let’s take a closer look at how the condition of your house can be improved to boost its value.
Maintenance Matters More Than You Might Think
Maintenance and repairs may not sound fun, but they’re the most impactful and cost effective way to improve your home’s value. While buyers might be ok with tackling aesthetic renovations to bring their vision of a dream home to life, they’re much less excited about dealing with repairs required to get a house’s infrastructure in decent working order. Depending on the state of your house, necessary repairs could knock tens of thousands of dollars off its value — the cost of the actual repairs and then some for the inconvenience of managing the process.⁴
According to Inman, “newer homes will sell for more than older homes because they’ll typically require less maintenance. However, an older home that’s been well-maintained may sell for just as much as a newer home — condition matters. Things like the home’s foundation, structural integrity, electrical work, plumbing and fixtures are all worth considering.”²
Aesthetic upgrades and renovations are unlikely to make up for pricey infrastructure issues, so make sure the following systems are in good working order first:
Beautiful siding that is well maintained helps bolster a high home value, while damaged or poorly maintained siding hinders it. Because cracks in siding can lead to larger issues, like damage from pests and mold, it can make for a hefty bill when the time comes for repairs.⁵
The foundation is the big concrete structure under your home that supports everything. Because it’s not particularly easy to access, it often gets overlooked, which can lead to a variety of pricey repairs. Issues in a home’s foundation can send potential buyers running for the hills. As with other infrastructure issues, catching foundation problems early can mean the difference between paying a few hundred dollars and tens of thousands.⁷
Plumbing issues are some of the most common problems homeowners face. Who has never had a leaky faucet or clogged toilet? Unfortunately, some repairs related to your septic tank can get costly.
Pro tip: Water heaters can cost upwards of $4,000 to replace, but should last around 10 years.¹³ To ensure yours lasts, flush it (or hire a pro to do it for you) every six months. If you have hard water, you may need to do it more often.
Electrical repairs can get pricey — $125 to start and upwards of $3,000 or more¹⁴ — depending on the extent of the damage and the size of your home. More importantly, loose or frayed wiring can be a safety hazard — think electrocution, fires, and power outages.¹⁵
Keeping your roof and gutters in mint condition can help avoid hefty repairs due to rot, mold, or other water damage. Depending on the situation, roof repairs can get to $5,000 and beyond.¹⁴
Pro tip: It’s tough to get up on the roof, especially if you’re not comfortable on a ladder. AAA House Manager can perform roof checks as part of our home maintenance and repair service.
If you have a deck, you’ll want to keep it looking good, lest it become a burden on prospective buyers and hurt your valuation. Plus, larger decks can command repairs of upwards of $4,000. A full replacement can cost anywhere from $5,000 to $10,000 on average.¹⁷
Replacing a furnace can get pricey — approximately $3,000 on average¹⁹. In addition, your gas bill goes up when your heater is not working efficiently (or isn’t sufficiently insulated, but we’ll get to this shortly).
Pro tip: The best way to save money on home repairs is to be diligent with maintenance. Change or clean your air filters every 30 to 90 days²² (or more frequently if a pet or allergens are present) to keep your HVAC system working optimally.
It may sound like a lot, but don’t panic. Every house has problems — even new ones!²³ The trick is to catch them early before they become critical or costly. AAA House Manager helps you keep on top of routine maintenance and avoid nasty surprises.
Chapter 3: Updates & Upgrades
Now for the really fun stuff! You’ve been staying on top of repairs and maintenance and your house is in wonderful shape, but you want to see what else you can do. Here are the most popular (and most impactful) renovations to help increase home value:
Adding a Bedroom
According to the premier real estate educators at FortuneBuilders, “There is a greater emphasis placed on the number of bedrooms and bathrooms than the size of the house. A smaller home with an extra bedroom will probably have more value than a larger home without the bedroom.”²⁴
If you have cash to spare — around $11,500 to $20,000 for a basic 10-by-10 foot bedroom²⁵ — this is hands down one of the most effective ways to increase your home’s value. On a budget? Build your new bedroom in an unused basement, attic, or over an existing garage or porch. You could save 20 to 60 percent by avoiding major earthwork or building a foundation to extend your livable square footage.²⁵
Pro tip: Add an extra half bathroom to go with your new bedroom. Even a half-bathroom can make a difference as buyers specify the number of rooms and bathrooms they’re looking for.²⁴
Creating an Open Floor Plan
Open floor plans are all the rage right now. They maximize square footage, natural light, add flexibility, and create flow, visibility, and greater connection throughout your home.²⁶ If your home is older and doesn’t have an open floor plan, it may be possible to knock down one or more walls in your living spaces. Just make sure to leave load-bearing walls intact to maintain structural integrity.
While it’s hard to pin down an exact number, a Realtor study found that homes with open floor plans appreciate 7.4 percent more quickly than homes with older floor plans.²⁷ And at $300 to $1,000 to remove a non-load-bearing wall, you are likely to get much more back in value than you put in.²⁸
Updating an Outdated Kitchen
Kitchen remodels are some of the most popular projects out there. They tend to be the center of the home where friends and family gather when they come to visit. So, not only do you want the space to be functional, but it should be visually appealing as well.
Generally, anything you do to improve your kitchen will add value.²⁹ The key is to focus on the right upgrades that will help recoup your costs. Anything too high end may not be worth the return on investment, so instead focus on the staples:²⁹
- Update countertops (it’s one of the highest returning investments you can make)
- Paint the walls and cabinets
- Replace outdated vinyl floors with hardwood or tile
- Update your kitchen sink or light fixtures
- Install new cabinets
- Purchase new, stainless steel appliances
The average kitchen remodel costs around $13,000 to $35,000.³¹
Renovating an Outdated Bathroom
Bathroom renovations are also quite popular, and for good reason. Similarly to kitchens, they are used frequently and can really benefit from a facelift. Again, you’ll want to remember not to go overboard with the renovations here: keep it classic and mainstream (no universal bathroom remodel unless you truly need it)³⁰ so that your home will appeal to the largest number of people, maximizing your bathroom’s value add.
- Redo the bathroom floor with a quality, neutral-toned tile
- Replace outdated fixtures with something elegant and timeless
- Give it a nice, fresh coat of paint
Bathroom remodels can cost anywhere from $2,500 on the lower end to upwards of $23,000 for more substantial renovations.³⁴
Converting Your Basement
If you have an unused basement, consider converting it into a living space. While it’s technically included in your square footage, you’re not benefiting from what’s called “livable space,” ie: space your family spends time living in, not just storage.³⁵ Plus, it has great ROI since you’re adding a brand new room at a fraction of the cost.
Here are some ideas to get you started:²⁹
- Add a bedroom
- Create a lounge area or sports den
- Add exercise equipment and you have a personal gym
- Convert the basement into a game room for the kids
- Build an in-law suite
While cost varies based on the kind of remodel, you can typically expect to pay between $35 and $75 per square foot on a basement remodel.³⁵
Pro tip: Before beginning any major renovation, seek expert advice. You’ll likely need to work with a licensed contractor to help pull permits and find well-skilled professionals for difficult tasks like moving plumbing or running electrical. Make AAA House Manager your go-to for renovation services. We have a licensed contractor on staff who is supported by a dedicated team of full time, AAA-employed professionals with decades of experience in home renovations — we don’t work with freelancers. Contact us to book a free consultation to learn more.
Chapter 4: Renovations not Worth the Cost
Now that we’ve explored the renovations and upgrades that have the most impact on home valuation, let’s look at those that are likely not worth the time, cost, or effort.
Master Suite Additions
It may sound like a good idea, but the numbers associated with adding a master bedroom simply do not add up. The average cost was around $156,000 to add a 16 to-24 foot bedroom complete with a walk-in closet and bathroom with a soaker tub to a house. The cost recouped is usually around 54 percent, or approximately $85,000.³⁰
Universal Bathroom Remodels
Universal bathrooms are a great example of a project that may improve your lifestyle, but not your home value. Installing grab bars or a wheelchair accessible shower is great if you need it, but will likely need to be uninstalled by the next homeowner. As a result, the sale price may suffer. Unfortunately, money put into a project doesn't necessarily equate money earned back in value or during a sale. ³⁰
Major/High-End Kitchen Remodels
All kitchen remodels are not created equal. The larger and more expensive the project, the less likely you are to recoup the majority of your investment. According to Remodeling magazine’s 2021 Cost Vs. Value Report, a major kitchen remodel costs $75,571 and homeowners recoup $43,364, which is 57.4%. An upscale kitchen remodel costs $149,079, with a 53.9 percent return on investment.³⁰ When in doubt, it’s best to stick to minor improvements, unless there is a large discrepancy between your kitchen and those of the other houses on your block.
Similarly, a mid-range or upscale garage addition does not add enough to a home’s value to merit the cost and inconvenience. You’re looking at paying somewhere around $60,500 to $90,000 and only recouping $36,000 to $48,000 of that, or approximately 55 percent.³⁶ That is, unless your home is the only one on the block with a smaller or missing garage.
While kids love them, adults know that they will be on the hook for year-round maintenance. If you don’t live in a sunny area where pools abound, it simply does not make sense to add a pool as prospective buyers — especially those without children — will not be keen to take on this added responsibility.³⁷
Chapter 5: Renovations That Hurt Home Value
We’ve looked at the good (improvement projects that increase home value), the bad (projects that have low ROI), and now we’re ready for the ugly. Unfortunately, some renovations can really hurt your home’s value.
Anything Overly Personalized
Being able to do whatever you want with your home is one of the perks of homeownership, but keep in mind that those quirky touches you love may turn off potential buyers — they’re not as good at “imagining the space as their own” as you might think — and hurt your home value. If you can, keep funky colors, trims, themed children’s bedrooms, etc. to a minimum.³⁷
Removing a Closet to Make a Room Bigger
People like closets. It’s as simple as that. A bedroom without a closet, even if it’s large in size, is not as appealing to a prospective buyer as a slightly smaller room with a closet.³⁷ It’s also not technically considered a bedroom, so removing a closer will lower the bedroom count for your home’s listing when it comes time to sell.
Bedroom to Office Renovations
This one is a little tricky since it sounds like such a great idea. You need an office. You have an extra bedroom now that Junior has left the nest. Get rid of the bed, add a desk and some filing cabinets, and you’re good to go! This comes down to that pesky “imagining yourself in this new home” scenario we mentioned earlier. It’s difficult for a prospective buyer to imagine themselves or their child in their new bedroom if it looks like an office.³⁹ You could, however, put your office supplies and furniture in storage and have an interior designer model, or stage, the room when you’re ready to sell if you have the funds.
Garages are kind of like closets. People want them and they expect them. Converting your garage into a gym may sound brilliant, but the next owner may not like working out at home and will most likely just want to use the garage for its traditional purpose: car parking and storage.³⁷
Hot Tubs or Above Ground Pools
We touched on swimming pools earlier under “Renovations not Worth the Cost,” but hot tubs and above ground pools, in particular, can really hurt your home value. Buyers tend to view above ground pools as an eyesore and may not want to maintain a hot tub.³⁸ A portable hot tub, on the other hand, can be a good alternative with older kids or adults since you can simply take it with you when the time comes to move.
If you’re going to spend money installing an in-home theater, aquarium ceiling, or sunroom, you can nearly be sure that these luxury improvements will make your home harder to sell down the line. These fancy additions aren’t popular with buyers, and they will likely prefer to spend their money elsewhere.³⁷
While intricate landscaping is undoubtedly beautiful and adds curb appeal to your home, the fact that it will require a lot of time and money to maintain will not be lost on discerning buyers who may not wish to take on the responsibility.³⁷
Chapter 6: Quick, Cheap, and Easy Things That Have Impact
Last, but certainly not least, all value adding home improvement projects do not have to be expensive or require construction. Here are some quick, easy, and inexpensive ways you can put a sparkle on your home — and in a prospective buyer’s eye.
- Plant new flowers and take care of bald spots in the garden or lawn
- Paint your front door
- Install a spa-style chrome shower head ($100!)
- Update drawer handles & cabinet knobs to give your kitchen a facelift
- Sand your kitchen cabinets, then stain or paint them
- Replace your towel bar with a new, shiny one
- Update old, outdated light fixtures
- Add solar lights to light walkway in yard
- Switch out old, worn house numbers
We hope you’ve found this guide useful. If your to-do list now feels overwhelming, we suggest starting with the repairs and maintenance, then making your way to the renovations. And of course, AAA House Manager is always here to help. Whether it’s a minor repair, much-needed home maintenance task, or a complete renovation, we’re here to help get your home’s value where you want it to be.
AAA House Manager provides home repair, maintenance, and renovation services to homeowners in the East Bay, San Francisco, and Sacramento areas.
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