When looking to increase the value of your home in Michigan, certain projects will provide a bigger bang for your buck than others. Home improvements that directly appeal to buyers and maximize livability tend to yield the highest returns. 

This article outlines the top value-adding renovations to consider if boosting your property’s worth is the goal. 

Understanding Michigan’s Real Estate Market

Like most areas, Michigan experienced a booming real estate market during the pandemic. Low interest rates and changing housing needs prompted many residents to reallocate funds to homebuying.

However, with mortgage rates rising in 2022, fewer homeowners are putting their homes on the market for sale. This has decreased housing inventory across the state but has not significantly slowed price appreciation. Ongoing buyer demand leads to bidding wars on the limited number of available properties.

The situation varies regionally within Michigan, however. “The housing market in West Michigan, particularly around Grand Rapids, has fared better than other parts of the state,” says Rick Seese, a longtime real estate broker in Lowell, Michigan. Meanwhile, Detroit suburbs show pockets of strong growth but also stable or declining prices in some neighborhoods.

Affordability poses a challenge both for current homeowners and prospective buyers statewide. Michigan’s 2022 Statewide Housing Plan found home values increased 84% from 2013 to 2021, above the national increase of 48%. 

New home construction has also lagged, with an average of half as many building permits issued from 2016 to 2020 compared to two decades prior. This suggests limited new supply relief for the tight inventory squeezing home prices upward.

Despite fewer listings, high demand continues pushing sale prices up across most of Michigan. Seese reports sales volume dipped only slightly from record 2021 levels. However, growth is uneven – rural areas see fewer bidding wars than the hot West Michigan market. Rising costs and loan rates may also be pricing some first-time buyers out altogether.

Current data from Michigan Realtors shows the statewide average sale price in August 2023 was $291,186, a 5.09% jump from the prior year. However, appreciation rates varied widely locally. 

Central Michigan near Mount Pleasant led with a 29.74% price leap. Other counties seeing above-average price bumps include Manistee at 24.91%, Grosse Pointe at 20.64%, and Battle Creek at 20.56%. In contrast, Huron County in the northeast saw a sharp decline of 27.91%, along with smaller drops in Detroit, Emmet County, Bay County, and St. Joseph County.

Tips to Increase Property Value in Michigan

Maximizing Usable Square Footage 

The livable square footage of a home is an important factor that impacts its value and price, according to real estate expert Benjamin Ross. More living space is generally better.

Increasing a home’s functionality by adding features like an extra bathroom, great room, or other needed areas can boost value by enhancing livability. Constructing an independent in-law or accessory dwelling unit is also often a sensible choice. 

As Ross explains, including such a separate suite is strategic because few competing homes offer that amenity, which distinguishes a property in the sales market. Overall, expanding usable interior space frequently translates to greater financial return at resale.

Give Your Kitchen an Updated Look

Many home buyers pay close attention to the kitchen, so an outdated space can lower your home’s value. Likewise, an inefficient layout won’t maximize this important room. Refinishing your existing countertops is a smart way to enhance your kitchen on a budget. It offers several advantages over full replacement.

According to New Finish, cost saving is a major benefit. Refinishing allows you to achieve a fresh new look without the large expenditure of installing completely new counters. The process is also much quicker than replacement. You won’t have to live with a construction site in your kitchen for long.

Plus, refinishing is customizable. You have options for both colors and textures so you can perfect the style that matches your vision. Whether modern and sleek or classic and timeless, refinishing delivers an updated space tailored to your taste.

By refreshing tired or dated counters, you’ll love your kitchen again without spending a fortune. If you want to explore how sprucing up your countertop can be a game changer then visit newfinishonline.com.  

A renovated space could also result in a higher sale price down the road. So consider refinishing – it’s an excellent choice for maximizing the useful life and value of your most important room.

Focus on the Front Door

Making a strong first impression starts with the front door. Replacing an older door with a new 20-gauge steel entry, especially one with glass panels and matching colors on both sides, can return 100% of the investment.

Front doors represent a sizable cost, with purchase and installation totaling $2,000-$3,000 or more depending on features and labor. However, experts say this expenditure pays off. According to construction professional Michael Winn, spending more on a quality door that feels sturdy reassures visitors unconsciously about the home’s condition.

While the front door may not be consciously observed, research shows its perceived integrity can positively sway a buyer’s decision in Michigan. A robust, aesthetically pleasing entrance establishes curb appeal and confidence in the property from the first perspective. Renovating this high-impact area is a wise real estate strategy for sellers.

Evaluating the Finances of Home Renovations

We have looked at all the tips. But, before beginning any home improvement project, thoroughly assess both the costs and potential financial returns. Careful budgeting is key to ensuring renovations stay affordable and homeowners don’t overextend themselves.

When estimating renovation expenses, factor in materials, labor, permits, and potential unexpected charges. Get quotes from multiple contractors when possible. Research similar past projects to learn from others’ experiences.

Homeowners should also analyze expected returns on investments. Examine comparable local properties that underwent similar renovations to gauge impacts on property value. Understanding potential ROI helps prioritize upgrades offering the best value relative to cost.

Consider long-term implications as well, especially ongoing maintenance and utility costs. Some renovations may cut energy bills long-term through measures like efficient appliances or added insulation. This enhances the total return over time.

With diligent pre-planning that scrutinizes costs and potential financial benefits, homeowners can make informed choices about renovations to increase property value and the long-term cost-effectiveness of home improvements. Thorough assessments lead to financially sound renovation decisions.

FAQs

1. How can you boost your home’s value by 20%?

A: Enhancing your home’s curb appeal with outdoor lighting is a quick way to increase its value. This addition not only creates a welcoming atmosphere but also improves yard safety, potentially boosting the home’s perceived value by up to 20%. Complement the lighting with a well-maintained lawn to further elevate your yard’s attractiveness.

2. What is the formula for determining property value?

A: The Gross Rent Multiplier (GRM) method is a straightforward way to assess a property’s market value. To calculate the GRM, divide the property’s current market value or purchase price by its gross annual rental income. The formula is Gross Rent Multiplier = Property Price or Value / Gross Rental Income.

3. What factors contribute to property value?

A: Property value is influenced by supply and demand dynamics. When the supply of properties is low, and demand is high, values increase, even if the property condition is not perfect. Conversely, prices tend to decrease if there is an oversupply of properties and low demand.

Making smart home improvements that directly increase livable space and refresh key areas like kitchens and bathrooms are among the most effective ways to raise a Michigan home’s value. Boosting curb appeal through upgrades like front doors and landscaping also significantly contributes to increasing the home’s value.

By thoroughly evaluating costs and potential returns, homeowners can select renovations that provide the best financial benefit. 

With the Michigan housing market remaining competitive despite rising prices, home sellers should focus renovations on appealing to today’s buyers and justifying higher potential sale prices. Small investments that make a property more functional, visually appealing, and move-in ready can go a long way in maximizing value and selling success.

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