A home equity line of credit (HELOC) can be a great way to finance a home improvement project. That’s because the flexibility of a HELOC lets you put the money toward any project you want. But some home improvements increase home value more than others. And when investing in your home, it’s beneficial to make decisions that will pay off down the road. To help you plan your remodeling projects, here are a few examples of home updates with the highest average return on investment (ROI).
Bathroom Remodel
Sometimes less is more. And in the case of a bathroom remodel, making a few key replacements and updates can offer a better ROI than a total overhaul. For example, redoing the caulk of a tub or shower is a cheap task that can drastically improve a bathroom’s appearance. Another inexpensive change is replacing a light fixture with one that better brightens the room. Investing a few hundred dollars could replace an old showerhead with a large rainfall model. And replacing a vanity and countertop with an updated model is possible for around $1,000 or less.
Exterior Improvements
Your home's exterior affects prospective buyer’s first impression of your property, so it pays to help it look good. Create some curb appeal! Trim back overgrown shrubbery, plant some colorful flowers, fix cracks, and use some sealant on any paths or walkways. Keep in mind, a property that appears to require a lot of maintenance may scare away buyers who worry about the upkeep. The average homeowner who makes landscaping improvements sees a 100% return on their investment.* Replacing the entry door can help a house feel new and sees an average ROI of 90%.* A new coat of paint is a cost-effective makeover, whereas replacing siding can be pricy, but usually has a good ROI when the materials are high quality.
Kitchen Remodel
Similar to a bathroom remodel, consider scaling back your efforts if your aim is to recoup costs. Spruce up kitchen cabinets with some paint or stain. Replace any aging appliances with energy efficient upgrades. You may want to consider investing $1,000 to $3,000 to replace old kitchen countertops if they’re damaged or dated.
Attic Bedroom Conversion
Not every home can support this, but if it meets the requirements, turning your attic into a functional, finished space may boost your home’s value and increase square footage. You’ll want a contractor’s help in evaluating the space to see if it meets local codes regarding height, width, structure, and access. Expect to pay around $40,000 to make this conversion a reality, with an average ROI of 93.5%.*
Deck/Patio Addition
If your property has ample space, adding a deck or patio helps add to the perceived living space. It can be a major selling point to some buyers, and it has an average recoup rate of around 90%.*
Basement Remodel
Transforming an unfinished basement into a warm and inviting living space can increase the value of your home. Tackle any flooding issues by addressing sloping and gutter issues outside the house. The addition of features such as a wet bar and recessed lighting can help greatly expand entertaining space. And while it can cost an average of over $50,000 to remodel a basement, the typical basement project recoups about 90% of the cost upon sale of the house.*
* Source: HGTV.
Get the Most Out of Your HELOC
Updating your home with the help of a HELOC can help boost its value and make it more appealing to future buyers. If you need assistance with how to utilize your HELOC, a member representative at DCU can help. Contact us by calling 800.328.8797 or by sending us an email.
This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.
*Earn More is a sweep feature. Eligible balances are automatically swept out to FDIC and/or NCUA insured deposit accounts held at participating financial institutions throughout the country. You will still have access to your checking account funds. The feature becomes activated on the first of the month following the month enrollment took place. The feature can only be added to one checking account per membership, excluding HSA Checking accounts. Learn More about the Earn More Feature here.
