5 Surprising Ways to Increase the Equity in Your Home

Jul 25, 2020

How to Increase the Equity in Your Home

Whether you’re a first-time homebuyer or an experienced investor, the decision to purchase a home should include questions about equity. If you’re planning on completing updates to the property, it’s important to know which upgrades are going to increase the value in the home. Any upgrades should be made based on adding value. So, the question remains: Which updates will increase the equity in your home?

First, let’s take a look at the definition of home equity. According to Investopedia.com, it is “the real property’s current market value less any liens that are attached to that property.” So, the property’s current value – mortgage = the equity in your home. When deciding on a home purchase, multiple studies have shown that the top three amenities that buyers look for are things like: highway access, walking/jogging/bike trails, and sidewalks on both sides. Proximity and availability of these amenities should be taken into consideration when comparing potential properties. Location, location, location--it’s all relative when it comes to home value.

Restoring an Existing Porch

Porches can be great spaces for entertaining guests and relaxing, but aging can cause them to look dingy, outdated, and cluttered. Even something as simple as new paint can have an impact on curb appeal and value. By updating the porch, you’re creating a more inviting outdoor living space for years to come.

Removing Junky Cars, Boats, and RVs

This one may seem obvious, but you would be surprised. Removing junk such as non-working cars, boats, and RVs from outside areas will add curb appeal and will help the overall look of the property. Clutter has no place inside or outside of the home when it comes to added value, so get rid of it! This project is also the simplest and least expensive way to add value to your home. Believe it or not, decluttering the exterior can add as much as 5-10% of value to the property.

Change the Flooring

Changing the flooring is a fantastic way to get your money’s worth during renovations. Good quality flooring is important to buyers and can make-or-break a sale. Observe your current flooring situation: is there a lot of wear like stains, worn pathways, or tears? If so, it’s time for an update. In general, the different types of flooring are carpet, vinyl, tile, and wood – with carpet being the least expensive. There are advantages to all of these, so do your research to make sure you’re making the right choice for you and the current housing market.


You may be surprised to find that painting a home provides the most return on investment. For significantly less cost than most of the other updates mentioned, you can give your home a total makeover. If you think about homes you’ve viewed that are bright colors, mismatched sheens, or scraped up walls, you know that it was a big turn-off. When you’re choosing a color, keep in mind that neutral colors appeal to the majority of people. A new interior or exterior paint job can provide a new beginning and an improvement to the overall value.

Trim & Molding

Adding trim & molding to the interior to a home provides a custom look that looks more expensive than it is. It can be a great addition to more formal rooms in the house, such as dining rooms, master bedrooms, and living areas. Relative to the cost of installing trim and molding, the added value is impactful. It’s an eye-catching addition that can benefit you in the long run.

You may also be wondering what type of improvements DO NOT add value to your home. Though tempting, additions such as swimming pools, sunrooms, high-end kitchen updates, or wine cellars will not help with increasing your equity. Unfortunately, you won’t come close to recouping the money you spend on those upgrades, so think carefully before deciding to complete these projects. They will only appeal to a specific group of buyers and may make marketing more difficult when the time to sell comes along.

For any renovation project, researching comparable properties in the neighborhood will ensure that you aren’t over-improving. Expensive upgrades can price you out of the neighborhood and affect your equity negatively. So, when you’re viewing homes and thinking about the changes you want to make, keep this list in mind and focus on the projects that will help bring your home more value!


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