When you’re selling your house, it is natural to want a bigger return on your investment – at least more than what you bought it for. One of the first thoughts that come to mind when looking to get a better price is to invest in in-depth home improvements.
In 2020, home improvement investments within the US amounted roughly to $418.9 billion. By 2023, the market is expected to grow up to $454.6 billion.
With luxury real estate in Las Vegas, the sky is the limit with the improvements you can make. There are low- and high-cost improvements that you can go with, but a good question to ask yourself in this case is whether the investment you’re about to make is going to help increase property value or not.
Home Improvements & Property Value for Real Estate in Las Vegas
Not every home improvement helps you increase the price of your property, and there is always a danger of over-improving which may actually lead to a decrease in price! As a homeowner, there are four basic types of home improvement projects you can embark on:
- Basic home improvement
- Home improvements for curb appeal
- Value-added home improvement
- Home improvements based on personal preference
Let’s Begin With Basic Home Improvements…
Before getting into more detail, it is important to point out that these home improvement investments don’t increase property value. These include improvements that every buyer will expect from you when buying a home.
These improvements include:
- Whitewashing the property
- Ensuring there are no leaks
- Functioning plumbing systems
- Reliable furnace and thermostats
- Solid floors and overall living conditions
- Any amenities that others in the neighborhood have, but your house didn’t
Installing HVAC systems specifically for selling your property might not result in an increase in property value, especially when considering luxury real estate in Las Vegas. These improvements aren’t really considered ‘upgrades’ but steps you took to ‘maintain’ the property.
Curb Appeal Home Improvements
Improvements that directly or indirectly will lead to an improved curb appeal will help your property’s outlook and therefore has the potential to increase property value. However, keep in mind that the increase may not be as significant.
These improvements include:
- A well-maintained lawn
- Low-level landscaping
- Fresh coat of paint outside the house
- New outdoor fixtures
When getting curb appeal improvements, it is a good idea to stay original and low-cost. Don’t overdo it, nor should you spend a fortune on these improvements, because the ROI may not be as high as you might be expecting. You can make these upgrades yourself as well to save costs.
Keep it subtle!
Value-Added Home Improvements
These are home improvement projects that really pay off. These improvements are a favorite of fix-and-flip advocates – and should be the first priority of homeowners. These include:
- New, contrasting house siding
- Addition of a pool or basketball court
- Kitchen renovation
- New countertops
- Modern appliances
- Better lighting and open areas
- New backsplash
- New windows
- Upgraded bathrooms
- Fresh tiles
- New countertops
- New vanities
- Refurbished decks and patios
- Energy-saving equipment
- Energy-efficient appliances and equipment
- Green energy generation (solar panel installation)
- Practical improvements, such as removal of a wall to improve the flow between the dining room and kitchen
These investments have the potential to recoup (at least) 80% of their costs when selling your house, or may even help you get a profit if you’re really lucky.
Home Improvements Based on Personal Preference
In terms of home improvement, personal preference investments are sort of a gamble. They can pay off pretty well if the buyer is also just as interested in those improvements as you are, or they might end up as just another improvement that does nothing in your favor.
Some personal preference ‘gambles’ include:
- Tennis courts
- Hot tubs
- Wine cellars
- Game rooms in the attic or basement
- Large landscaping projects (such as ponds), and more
- Removing walls to get more space
- Combining two or more rooms
- Remodeling the basement or attic
How Soon Should I Sell? Is Holding on to a Property Worth It?
If you’re not an investor dealing in property, selling your house too quickly can actually end up costing you. It costs investors too, but they can chalk it up as cost of business. You, as a homeowner, on the other hand, can use any and all boosts to buy your destination luxury real estate.
We mentioned in a previous article how you can benefit from long-term capital gains from sale of property, along with tax benefits of homeownership. According to the National Association of Realtors, homeowners remain in the same house for an average of 10 years.
Our experience suggests that you should stay in a home for at least five years before moving on. One of the prime reasons for that are the transaction costs included in buying and selling the house. You should consider staying in the same house until you can recoup those transaction costs. By staying for five years in the same house, you also become eligible to the tax benefits we mentioned above.
However, there are several factors to consider here as well. If you have a new job opportunity, a developing family situation, or any other major life event that demands you change the house, then you need to consider the opportunity cost of leaving your house.
If you don’t time your property sale right, you will end up losing money, but you will have to consider what is more valuable to you; the money you’ll lose because of the quick transaction or the reason you’re moving.
Having said that, staying too long in the same house, especially if you are unable to keep it well maintained, can lead to reduced costs as well.
Some of the transaction costs to consider here include:
- Agent commission
- Escrow (if applicable) and other closing costs
- Moving expenses
- Prepping your old home
- Prepping the new home
- Hauling expense
- Mental and physical exhaustion
If you’re wondering about a specific home improvement plan, i.e., whether it will help you improve your property’s value or not, we recommend you get in touch with us at The Vegas Group for a quick, free consultation.
Disclaimer: There are numerous factors to consider in every investment, including real estate. The information provided above is just a matter of opinion and can change with time. It shouldn’t be construed as legal or tax advice; neither does the report constitute a financial promotion or investment advice. It is general information and before making any such decision, you should seek out licensed professionals and see all ends clearly.