Varying extrinsic factors can cause property values to increase or decrease, as shown by the implosion of the housing and mortgage markets beginning in 2004. You can't do much about these factors, but you can influence the intrinsic factors that drive your home's property value.
Intrinsic factors are under your control and are contained within your property line--painting, remodeling, replacing--and have a direct effect of bumping up your home's value.
1. Build Second-Story Home AdditionAny time you can uptick a house's vital statistics--numbers related to a house, such as square footage, number of rooms, or bathrooms--you stand a greater chance of infusing your home with long-term property value. And there is no better way of doing this than to build a second-story addition, which essentially doubles the total square footage of your home.
Bigger homes almost always mean that you can command a higher selling price for your house, despite the current real estate market. In the heady days of a booming real estate market (2005), a second story home addition could recoup about 95% of its cost upon sale (numbers declined to around 62% in 2010-2011. Those are impressive numbers, when you consider that most remodels and additions return far less.
2. Replace Siding With Fiber-Cement SidingSiding is a great plus that doesn't involve the giant expense of tacking on square footage. But that doesn't mean it is inexpensive, especially since we're talking about a premium siding that resists rot and holds color exceptionally well.
History has shown that fiber-cement siding replacement is a great way to increase your property value. In the period 2005-2011, homes sided with fiber-cement (HardiePlank is one brand-name) have returned 80% to an astounding 105% of their initial cost. Expect to pay at least $10-16,000 for 1,250 square feet of fiber-cement siding, installed.
3. Finish Your BasementReal estate sales literature typically highlights finished basements. Basements are expected to be dark, functional places for the washer and dryer, furnace, and water heater--so it's significant bit of lagniappe when a basement is billed as refinished.
Basement finishing is far cheaper than building an addition, because you are not expanding the house's envelope. Also, while additions require the skilled hand of contractors and tradesmen, even moderately experienced DIYers can refinish a basement.
A basement remodel is seen as a lower-value remodel than an actual addition, yet far better than a garage conversion--one remodel that can even scare away home buyers. The presence of moisture, lack of natural lighting, and difficulty in heating are critical issues with basements, so be sure to consider remodeling your basement in a sustainable fashion.
4. Major Kitchen RemodelSparkling new kitchen remodels occupy hallowed ground in the minds of most home buyers. A moderately priced full-scale kitchen remodel will return short-term value to you--as a cook or simply someone who loves to eat!--and also long-term value to you in your future role as a home seller.
Keep in mind that a "moderately priced" remodel can run as high as $40,000-$60,000 (for high priced, you're looking at $60,000 to $110,000, or more). This means a complete swap-out of everything in your current kitchen, but without the fancy touches of granite, stainless steel, and artisanal Tuscan tile.
5. Add a Family RoomA family room is one of the least expensive house additions (though still expensive) because you are basically adding on an empty box with a minimum of services. While electrical and HVAC are present, there is no plumbing, tilework, or expensive fixtures--all of which are found in bathrooms. A family room or great-room addition is an instant "square footage adder" that goes up relative quickly.
Final Note: Is Curb Appeal the Same Thing?One common misconception is that improving curb appeal is the same thing as increasing the home's property value.
"Curb appeal" refers to the initial impression potential home buyers have within the first few minutes of seeing your house. Though curb appeal typically refers to exterior aspects of the house, it is often extended to refer to interior aspects as well. Exterior curb appeal might mean lawn, exterior paint, shrubs, walkway, window trim, and cleanliness. Interior curb appeal would mean the home's general paint scheme, the smell of the house, or the condition of the flooring.
But increasing your home's long-term property value is a more substantial action than just cutting the lawn or putting a fresh coat of paint on the house. Consider undertaking remodels benefiting you at sale--and which enhance your current existence in the house.
Property value is a slippery topic, and ultimately the value of a home--as with the value of anything--is subjective and based on the desires of buyers. If market conditions are right, even lower-quality curb appeal-type fixes may temporarily add as much juice to your property value as the substantial remodels mentioned here.