10 Factors That Make or Break the Value of Your Home

You may be a homeowner or a potential buyer, or you might just be addicted to the real estate listings, but whoever you are, you know that the best direction for a home's value to go is up. But the value of a home is contingent on many things, both inside and outside a homeowner’s control.

By Jamie Birdwell-Branson | Updated Mar 30, 2020 07:10 PM

The Ups and Downs of Real Estate Values

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Factors That Make or Break Home Value

Assessing a home's value is complicated, which is why the job is reserved for professional appraisers. When they're appraising a property, these professionals look not only at the condition of the house itself, both inside and out, but also at the surroundings and neighborhood to make an accurate determination of how much the home is worth. 

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Landscaping

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Attractive Landscaping

As much as you may love looking at renovated interiors and inspiring before-and-afters, a surprising amount of a home's initial impact comes from the state of the landscaping. Good landscaping—beautifully pruned shrubs, a manicured yard, and flourishing flower beds—can increase a home’s value by a whopping 20 percent. But if the landscaping consists of unruly vines obscuring the exterior siding, a patchy yard, or shrubbery that blocks the view to the house, it’s likely to lower the property's value and drive away potential buyers.

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Foreclosures or Short Sales in the Neighborhood

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Nearby Foreclosures

Your house may have a brand-new kitchen, a remodeled bath, and a recently replaced roof, but all that hard work and investment may be for nothing if your house sits on a block full of foreclosures and short sales, especially if any of the foreclosed homes are comparable in specs to yours. The reason? When appraisers assign a value to a home, they look at comparable properties. In the process, they may take nearby distressed properties into account, which would have the effect of lowering the value of your home.

Related: 13 Signs Your Home Is Losing Value

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A Pool

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Backyard Pool

Having a pool right in your backyard means endless summer days of splashing in the cool water and poolside barbecues with the whole neighborhood—but that idyllic retreat could also lead to a decrease in property value. It’s not that people don’t enjoy a good swim; it’s just that many potential buyers see a pool as a danger to young children or a burden to maintain. If you're contemplating a new pool, keep in mind that the expense of a pool hardly ever gets recouped when you go to sell your home. Expect at most a 7 percent increase on resale value.

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Replacing Your Garage Door

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New Garage Door

Although it may seem practical and dull, replacing a garage door is one of the only home renovation projects that can actually recoup your full investment when you sell. According to Remodeling Magazine’s 2019 Cost vs. Value Report, a garage door replacement can recoup 97.5 percent of the project's cost upon resale and can add great curb appeal. On the flip side, a garage door that’s broken or that has peeling paint can detract from the appearance of a home and decrease its value.

Related: A Flipper’s Top 10 Tips for Increasing Home Value

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Being Near a Billboard

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Nearby Billboards

You can control what the inside of your home looks like, but unfortunately you have no control over what’s beyond your front yard—including billboards. A study has shown that homes located within 500 feet of a billboard are worth $30,826 less than homes farther away. What’s more, the researcher found that cities with tighter billboard controls had greater median incomes and lower vacancy rates.

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An Updated Bathroom

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Newly Renovated Bathroom

The bathroom is one of the most heavily used places in the home and one of the quickest to become outdated, thanks to lightning-fast trends that come and go. (Anyone remember shag carpeting on the bathroom floor?) But even a fast, budget-friendly bath refresh can potentially increase your home value 2 to 3 percent. Conversely, an outdated bath, even if it's clean and well maintained, could prevent your home from reaching its full potential value.

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A Modern Kitchen

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Modern Kitchen

The kitchen isn't just the heart of the home—it’s also crucial in determining property value. In fact, even a minor kitchen renovation can recoup about 80 percent of its cost on resale. Fixing up the kitchen is a surefire way to increase the value of your home because this buyer’s favorite is the room that is used the most. On the flip side, a kitchen that’s stuck in the 1980s or '90s doesn't do your home any favors and could drop your home's value down.

Related: The Cheapest Ways to Boost Your Home's Value

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Energy-Efficient Windows

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Energy-Efficient Windows

Though not as exciting (or visually satisfying) as a kitchen or bathroom renovation, installing energy-efficient windows is one of the smartest projects you can take on. This upgrade improves the look of your house, lowers your energy bill, and adds major value to your home, recouping up to 60 to 90 percent of the project's cost when it's time to sell.

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Economic Downturn in Your City

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Economic Downturn

Property values rise and fall based on the condition of a house and the neighborhood, but they are also influenced by the overall economy. If the local economy experiences a downturn, it’s almost a certainty that your home will decrease in value simply because no one will be looking to buy.

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A Sex Offender Lives Nearby

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Sex Offender Neighbor

Although you have zero control over who your neighbors are, some of them—like sex offenders—could be causing your property value to drop. Because buyers are leery of moving near a convicted sex offender, simply having one next door could decrease your home's value as much as 12 percent, according to one study.

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