Proactively Maximize Your Deed’s Value—Don’t Just Wait.

Inflation, whether it runs high or moves at its historically normal rate, erodes your dollars.

As a deed holder, at least you do have certain ways to offset inflation. A key method? Proactively boosting your deed’s value through home improvements.

If You Can…

We get it. Not everyone is in the position to upgrade their home. Repairs, let alone improvements, are almost always more costly than a homeowner expects them to be.

And now we have the tariff issue. Tariffs operate like taxes on the consumer. They make home maintenance and replacements of systems and appliances even more expensive. As Emmanuel Cau of Barclays told NBC networks, “no one wins from trade war, and clouds are gathering over the global growth outlook.”

Keeping your home in tip-top shape is no easy task, especially when price rises are outpacing income. But that’s exactly the point. Where you can bolster (or at least preserve) your home’s value, you create a bigger return on the investment you made in your deed.

Does Curb Appeal Matter to Appraisal Value?

Yes, it matters. The first impression your home makes on others, no question, can impact the value of your deed. Many buyers do not want to start their homeownership experience having to take care of a laundry list of tasks. Plus, a home that appears cared-for presents the overall impression of the seller’s dedication to regular maintenance.  

What does this say about how owners can work proactively to preserve their home values? They can start off by clearing up the obvious dings, both outside and inside a home:

• What signs of depreciation (wear and tear) on the property are visible to the passer-by?  

• Is wall-to-wall carpeting covering up valuable hardwood? Consider refinishing the wood flooring to boost your home’s appeal and value.  

•  Got wallpaper? It’s time to take that off. Welcome the freshly painted look to your walls today.

There are things which ding your home’s value that you can’t do anything about, of course. These include abandoned addresses in the area, traffic noise, cellphone or wind towers, electric company outposts, landfills, even so-called stigma (like a past death on the property).

This is all about changing the things you can change.

On the Plus Side: What Upgrades Can Boost Home Appreciation?

Outdoor features are also boosting sellers’ returns. Look around at other nearby homes and see what features are expected. Simply browsing nearby listings can help you get started.

And maybe it’s time to take out those decades-old kitchen cabinets. Brass fixtures in the kitchen or bath? Consider installing more up-to-date replacements for these.

According to Zillow’s current research and guidance, homes that have natural stone, wooden cabinets, or rustic, textured walls typically sell at a premium today. Consider touches like countertops made from organic materials (think soapstone), for example.

Now, we’re not financial advisers. But we pay attention when Zillow® says these features support the home’s value to buyers.

And if you’ve got a fireplace, flaunt it. If it’s patched over or filled in, see if you can have it restored to working order. Have a chimney company perform a camera inspection. The company will let you know what happens next: cleaning, liner replacement, and so forth. The work will pay off in market value, real estate experts say.

The open-plan layout is desirable today. You might consult a contractor to see what needs to be done to update your home’s interior. In any case, make sure all fixes and improvements have the right permits, if required by the association or the local government. Otherwise the home’s value isn’t helped — especially if your work has to be redone!

Making upgrades to your home? Don’t miss our deed holder’s guide to getting the right permits.

Is There Insurance for Potential Loss of a Home’s Value?

Remember the old saying “there goes the neighborhood”? Norman Lear’s hit show All in the Family practically made that an entire sitcom theme. Even an irrational fear of home value loss can actually tank prices, leading to a vicious cycle as the more well-off homeowners leave for greener pastures.

A few cities, like Chicago and some of its suburbs, developed equity protection insurance. It did strengthen neighborhoods, by giving deed holders confidence that they wouldn’t lose money.

But these insurance products generally have pricey premiums, or they have to be subsidized. So, there have only been a few examples of these plans and most were short-lived. Chicago still does offer home equity insurance in three designated home equity districts. The programs are paid for by taxes, agreed on through residents’ votes. So there are no premiums — just a $150 registration fee. After five years, if a covered home can’t be sold for its appraised value, the district covers the shortfall.

Most of these schemes have done well and basically put themselves out of business — just by incentivizing deed holders to stick around while their home value goes up. It’s a matter of swimming with the tide, because home values tend to rise over the years just about everywhere.

If Home Values Tend to Rise With Time, Why Does the IRS Give Deed Holders Automatic Breaks for Depreciation?

Properties generally get more expensive over time. Yet the Internal Revenue Service allows deed holders to write off depreciation for investment properties. What’s with that?

Supposedly, while land goes up in value over the years, a building loses value through normal wear and tear. But let’s be frank. In most areas where investors want to buy, pieces of land appreciate more than their structures depreciate.

So, is this break a sort of insurance for wealthier deed holders? If that’s what you’re thinking, spot on. The tax break for property depreciation generally helps investor-buyers avoid taxes and accumulate more wealth.

And That’s How the Game Works.

A deed represents land, and land tends to appreciate. At the same time, what’s inside a home will gradually decline in value. Appliances will rust. Carpets will fray. Cabinetry, countertops, and fixtures will start to look dated. Granite and quartz are less stylish than they once were. Overall, interiors lose their marketability if left alone.

A deed holder can act to preserve the home’s value with upkeep and replacements. That costs money — either now, or in missed profits in a home sale later on.