Smart Ways to Splurge on Your Home With Tax Refund Money
How to get the biggest bang for your buck when it comes to home improvements.
Tax Day was April 17 this year and millions of Americans will have filed their income tax information with the Internal Revenue Service by the deadline. As the old saying goes, the only things in life that are certain are death and taxes.
As frustrating as all those forms might be, there might be an upside to the madness. According to information from the IRS, over 80 percent of those who file their taxes get a refund and the average refund amount is $3,120. Of course, every situation is different but there’s a good chance you may be receiving some money from Uncle Sam in the coming months. That’s always a good thing.
If you’re fortunate enough to receive a tax refund check, there are many ways to put the money to good use. Saving is always a good idea. So is paying off debt. Many people though choose to invest in what is likely the most expensive thing they own: their home.
Some projects will improve the look and functionality of your house, but only a few will likely increase its value —meaning when you go to sell, you can list it for a higher amount because you put money into specific projects.
Return on investment is very important, especially for young homeowners who will likely be looking to sell in the near future. To get the expert scoop, I chatted with Svenja Gudell, chief economist at Zillow, about the biggest value-adding projects refund-rich homeowners should consider.
The test? I gave Gudell multiple home improvement projects and she picked out which one was the better investment, and why. Keep in mind, though, the housing market fluctuates and while these suggestions come from an expert with in-depth knowledge, they shouldn’t be taken as hard-and-fast rules.
Landscaping or Outdoor Space?
Contemporary House With Curb Appeal
On an eye-catching corner lot in Houston, Tex., seasonal interest is achieved through the use of a vast number of species that bloom throughout spring and summer, as well as species with fall color or winter fruit to stand out in the off season. The goal of the project is to minimize physical labor demands in a contemporary garden design to match the architecture of the home,
Landscaping is the way to go here, says Gudell. If your aim is to sell your house, putting in a deck is expensive and it does not get you your money back when you go to sell. A lot of personal preference goes into designing a deck and it's not easily changed.
If you want a deck and don't plan on moving in the next five years, absolutely do it, but if your goal is to sell your home for more money than you put in, Zillow's data shows putting in a deck isn't the best option.
Before: Plain Jane
With overgrown landscaping and a disappear-into-the-background white paint color, this California bungalow was generally considered one of the least attractive homes on the block. Narrow, winding stairs and an overgrown trumpet vine and small tree that block the front door add to the home's uncared-for look.
After: Colorful Cottage
To make the home pop, designer John Gidding chooses sunny yellow for the siding and cheery turquoise for the front door. The winding stairs are straightened and widened to draw more attention to the front entry which is shaded by a honeysuckle-coverered arbor. The homeowners aren't big fans of mowing the grass so John eliminated the lawn in favor of a wide stone path flanked by low-maintenance plants.
After: Ranch-Style Standout
Fixer Upper's Chip and Joanna Gaines worked their magic to give the formerly rundown ranch a massive curb appeal boost. Thanks to a bit of selective trimming, the front yard’s ancient tree is now an asset instead of an eyesore while the existing cedar siding was brought back to life with a good cleaning and sanding to reveal fresh wood before resealing. A low stacked stone wall and new landscaping soften up the façade.
Before: Faded Belle
The homeowners are two of the French Quarter's most colorful characters but their home's vanilla facade is definitely lacking. A tumble of weeds fill the beds that line the porch and the concrete set-back, or small area that separates the home from the sidewalk, is broken and unlevel.
After: Big Style in the Big Easy
Jason Cameron comes to this belle's rescue with kicky paint colors, a bluestone patio to replace the crumbling concrete and a cast-stone fountain. The weedy beds are given a tropical makeover with dwarf pygmy date palms and striped stromanthe that tie in with the home's new color palette.
Before: An Architectural Mismatch
Dubbed “the cargo ship house” by Fixer Upper’s Chip Gaines, this long, gray and bland exterior was certainly short on charm. The ranch-style brick portion was originally built in 1958 with the wood-clad second story tacked on as a later addition.
After: An Artful Addition
Wow, what a transformation! Chip and Joanna dramatically took this home from sad to stately with a porch bump-out that features post-and-beam construction, horizontal railing and a flagstone porch and stairs. Woodsy green paint, new windows and black shutters further boost the home’s curb appeal.
Before: Overgrown Adobe
The black sheep of the street, this small Spanish Colonial Revival-style home built in the 1920s, is a rarity in suburban Atlanta. It has the potential to be a real gem in the neighborhood but with a barren yard, overgrown arbor and faded stucco, it only stands out for its rundown appearance.
After: Spanish-Style Standout
The the Curb Appeal team start the makeover at the curb with this one, creating wide tile-accented steps that lead from the street to the new front porch that spans the entire length of the home's facade. The front yard is replaced by a circular stone courtyard surrounded by hardy ferns, petunias and banana plants.
Before: Past Its Prime
Built in 1959, this midcentury modern rancher isn’t the typical candidate for a makeover in Fixer Upper Chip and Jo’s signature farmhouse style but the home’s location and size won over the homeowners.
After: Mid-Mod, Made-Over
A fresh coat of white paint brightens up the formerly muddy brick while cedar mullions update the home's signature midcentury modern architectural feature: the floor-to-ceiling corner window. A matching cedar front door and window boxes tie into the window’s new look. To further lighten up the home’s exterior, Joanna swapped the brick in the low planters for gray stacked stone. Low plantings of ferns, ornamental grasses, dwarf laurels and Indian hawthorn replace the home’s leggy, overgrown boxwoods.
After: Can't-Miss Yellow
Cousins Anthony Carrino and John Colaneri remove the overgrown evergreens, replacing them with oakleaf hydrangeas, hostas and bronze-leafed heuchera. Bright chartreuse false cypress really liven up the landscape and pair beautifully with the home's sunny yellow front door.
After: Warm Welcome
A few coats of fuchsia paint take this formerly ho-hum front door from drab to fab. The cheery pink theme is carried to pots flanking the doorway filled with bouganinvillea and candytuft. The terracotta tile steps and board-and-batten siding also receive a makeover with fresh coats of warm, neutral paint.
After: Timeless Transformation
Fixer Upper's Chip and Jo pulled off a big update for minimal effort with just a few swaps. They replaced the uninspired rows of boxwoods with decorative grasses and other low growers so they don't compete with the home's original long windows. To give the entryway more presence, the front door niche was eliminated and Jo added a pair of beveled glass French doors surrounded by large glossy black planters and matching gas light-style lanterns.
Before: Haunted House?
The owners of this century-old San Francisco home are parents to five kids, including two sets of twins, so yardwork and home maintenance has taken a back seat to raising their family. This home is also, not surprisingly, a hub of activity each Halloween when the owners put the Victorian's forboding looks to good use as the neighborhood haunted house.
After: High-Style Victorian
John learned that the home had been white since its construction (120+ years ago!) so in keeping with true Victorian style, he chose no less than seven paint colors to really make this painted lady the neighborhood showstopper. To complement the historic architecture, the Curb Appeal team replaced the front lawn with a parterre — a formal garden made up of symmetrical hedges and planting beds connected by paths.
Before: '60s Modernist
The current owners were drawn to the home's Modern aesthetic and streamlined details but the ho-hum landscaping is definitely lacking. Three generations of one family live here and want to be able to use the hilly, uneven front yard as more of a gathering and entertaining space.
After: A Nod to Midcentury Mod
Designer John Gidding decided to save the existing mature trees, building a massive deck to surround them. The uneven front yard is elimated by a concrete retaining wall that brings the deck up to front door height. Concrete planters at street level are filled with boulders, agave and desert grasses while rosemary tumbles over the wall from the deck.
Before: '70s Mish-Mash
NYC techies, tired of cramped quarters, decided to relocate to Texas where everything is bigger. Browsing homes online, they discovered this split level whose newly remodeled interior had everything they were looking for and they quickly decided to buy it — without ever seeing the home in person. Once they moved, they discovered that the home's exterior was desperately in need of a remodel too.
After: Neutral + Natural
Contractor Jason Cameron and the Desperate Landscapes crew come to their rescue with a fresh neutral color palette that better blends the home's siding with the stacked stone facade. Boulders and layers of drought-tolerant, native plants, like the blooming Texas redbud, ensure this fully landscaped front yard will be easy for the homeowners to maintain.
Before: The Neighborhood Eyesore
Built in 1927, this massive home sat vacant and uninhabitable for several years before a brave couple bought it from the city of Waco for a mere $24,000. They then worked with Fixer Upper’s Chip and Jo to turn the derelict house into a gracious home.
After: The Neighborhood All-Star
Can you believe this beauty was hiding behind the overgrowth? Chip and Jo cleared the land around the house so they could start fresh with new sod and plantings. The home’s existing porches were unsafe so they were rebuilt but the nearly century-old windows were salvaged with new leading and a fresh coat of crisp, white paint. A new wide concrete pathway, lined with variegated monkey grass, beckons guests to wander up onto the welcoming front porch.
After: Craftsman Cutie
The homeowners want to be able to relax in the front yard while keeping an eye on their young boys and chatting with neighbors. Designer John Gidding delivered by expanding their too-small front porch and adding new steps that lead down to a wide walkway flanked by a long curving bench. A low gated wall separates the front yard from the sidewalk and really makes the front yard feel more like an outdoor room.
After: Grand Dame
To return this elegant home to its refined roots, the Curb Appeal team beefs up the moldings surrounding the entryway and windows. Look-at-me colors and a two-tone palette make the home feel even larger. An usable low area to the left of the entry is transformed into a sunken deck surrounded by planters filled with cheery annuals that tie in with the home's magenta front door and tall cypress trees for height.
Before: Overgrown Bachelor Pad
Fifteen years as home base to a bachelor with no time or interest in lawn maintenance has resulted in a front yard so overgrown that a family of deer once moved in and took up residence. Now married, the young California couple who own this home are ready to clean up their act but don't know where to begin.
After: Manicured Zen Garden
Mixed in with the weeds were a lot of boulders and rocks so designer John Gidding decided to work them into the design. Ornamental grasses, pieris Japonica, loropetalum and other low-maintenace plants fit with the garden's Zen feel while being easy to care for so the homeowners can maintain the garden's good looks.
After: Open and Inviting
The the Curb Appeal team start by demoing the metal fence to open the property up to the street where a stone path leads to the home that has been freshly painted in cool blue with a pop of cheery yellow on the front door. The homeowners weren't big fans of mowing the grass so John eliminated it in favor of mulch and ornamental grasses.
Before: Reno Gone Wrong
Selected out of hundreds of submissions as America's most desperate landscape, this home outside San Diego is an embarassment not only for the homeowners but for the whole neighborhood. The yard is unlevel, full of weeds and littered with the remains of home improvement projects gone bad.
After: California Cool
Contractor Jason Cameron and the Desperate Landscapes crew start by removing the construction debris, then the improvements begin with a new travertine patio shaded by a streamlined wood slat pergola. The existing boulders are moved to the lot's corner where they're joined by tons more rock for a sculptural accent. The landscaping goes from lacking to lush with mature indigenous trees and shrubs and the siding and garage door receive a fresh coat of paint.
Before: Failing Fixer-Upper
The first-time homebuyers fell in love with this century-old home's potential but, bogged down by interior projects, they don't have time to tackle the front yard or porch where siding-clad supports create a dark, claustrophobic feel and aren't original to the home's Craftsman style.
After: Charming Craftsman
John replaces the siding-clad columns for Craftsman-style tapered timber columns that are more in keeping with the home's original character. The couple only used the front yard as a path from the driveway so John swapped out the small lawn for a new, wide walkway surrounded by heuchera, pentas, succulents and low-maintenance grasses.
After: Folk Victorian
With such a small lot, landscaping takes a back seat to improving the home's architecture. John and team pull out all the stops by adding layers of gingerbread-style trim that's reminiscent of true Victorian architecture. So the home's main color doesn't detract from the trim details, the team paints it a warm neutral tan saving the cool purples and blues for the trim. To complete the fairytale look, a picket fence lines the front and a brick path leads to the turquoise front door.
When it comes to landscaping, you can make a lot of simple changes that are appealing to the masses. A house that is polished on the exterior leaves a good impression on potential buyers and shows that the house is taken care of.
New Roof or Pool?
California Style Home Collections
Gudell's take? There's not a clear answer here. In many states such as California, Florida and Texas it is expected of you to have a pool and not having one puts you at a disadvantage, especially if everyone in your neighborhood has one.
Dreamy Urban Deck
This ipe deck includes a custom powder-coated steel planter with native and drought-resistant perennials and shrubs. Design by Groundworks, Inc.
This warm redwood deck pops against the bright colored pergola. Add whimsy with hanging and crawling plants in a variety of colors and a wall of floating windows. Design by Claudia Schmutzler
This late 19th century home was completely refurbished, including a beautiful private porch that overlooks magnificent landscaping. A comfortable seating area complements the space and an outdoor rug anchors the primary seating area. Design by Ron Nathan
Warm, natural elements like redwood, brick and plants make this outdoor space cozy. The custom brick pizza oven adds an element of fun to the space, which is perfect for family gatherings. Design by Claudia Schmutzler
For a couple who wanted a garage remodel so they can develop their cooking-school-for-kids business, Jamie Durie created a "vegetable boardwalk" as part of the larger makeover. The vertical gardens greatly expand the amount of produce the couple can grow, and edibles are near the kitchen for easy care and harvest.
These neutrals work together to create a sleek and cozy outdoor space. The warm redwood deck and pergola are accented with creamy neutrals in the furniture and stone elements like the fire pit and walls. Design by Claudia Schmutzler
Beautiful plantings, colorful details and streamlined simplicity accent this Asian-style dining area, designed by Jane Ellison.
A Daybed to Remember
A fabulous swinging daybed provides resting space near the kitchen and dining counter on this contemporary urban deck. A grade-level planter adds year-round greenery. The arborvitae will fill out to create a green wall. Design by Adam Miller
One of the eco-friendly elements of HGTV Green Home 2012 is the barbecue courtyard. Born of architect Steve Kemp's vision for a truly green design, the outdoor space replaces the conventional backyard, which would have required major regrading of the site and the construction of retaining walls. "Now the 'yard' is open to almost every room in the house, rather than being open to one or two rooms," he says.
In regions without year-round pool weather, Gudell would suggest a new roof, instead. A roof that needs to be replaced can be a red flag in a pre-sale home inspection, and the buyer will often ask for a price reduction. So, one way or another, you'll be paying for a new roof.
Smart Appliances or New Windows?
Rustic Home With Energy-Efficient Design
This relaxed home was created for Tim Brown and his family. A large focus was placed on making the home as energy efficient as it is aesthetically pleasing. The placement on the site was key in keeping it a low-energy-using home. With lots of cross ventilation and clerestory windows to vent heat, the home's energy bills are half the amount of a typical home in this area. A rainwater collection system was also incorporated to catch 100 percent of the home's potable water.
Zillow's data revealed that putting in new windows gave homeowners a bigger bang for their buck. While some people find energy-conscious, "smart" items nice to have in the home, it's not usually something they're really looking for. Not to mention, it's much easier to install a smart thermostat than it is to install new windows for the entire house.
Paint or Crown Molding?
Small Sitting Room with All White Walls
Because this home is so small it was important to the homeowner to keep every room open to the next. Furniture and color help define the separate spaces without breaking the simple, neutral color palette.
Design Styles Architecture
Definitely paint, but Gudell warns to stay away from "unique" colors that don't have a broad appeal. Instead, go neutral or opt for on-trend hues. Not everyone loves crown molding and if it's not done well it can look bad or clash with the style of the house. Molding doesn't always come together, but everyone enjoys a fresh coat of paint.
New HVAC or Finished Basement?
Stunning Red Couch, Armchair & Ottoman Wow In A Basement Home Theater
Stunning plush sectional, armchair and ottoman in red upholstery and leather excite in this all encompassing basement. Transitionally styled, the space features a home theater with built-in cabinets and fireplace, a wet bar with and additional table and seating, all framed within several different types of wood and stains to match the unique floor. Dropping portions of the ceiling creates a comforting room within a room feel.
©Finished Basement Company
Gudell's personal preference for this one is a finished basement. From a purely aesthetic point of view, you'll get more rave reviews from potential buyers from a finished basement than a new HVAC. Plus, if your HVAC works with no issues, why replace it? If it's on its last leg, though, you should replace it or be prepared to lower the selling price of your home.
Updated Flooring or New Kitchen Cabinets?
White Contemporary Open Plan Kitchen With Wood Floors
Wide-plank wood floors soften the minimalist look of this gorgeous kitchen, adding a welcome natural touch to crisp white cabinetry and metal accents.
Design Styles Architecture
Kitchen upgrades, according to Gudell, are very taste-dependent so she recommends flooring. A lot of determined home shoppers have their perfect kitchen in mind and if your taste doesn't match theirs, they'll want to tear it down and they're certainly not likely to pay a premium for it either. If you go with a nicer upgrade, Gudell says you definitely won't get your money back.
Distressed Wide Planks
Wide-plank flooring is increasing in popularity, due to its beauty and fewer seams. It comes in a variety of wood types, but choose a distressed wood if you want a rustic look. Design by Fiona Douglas
Most reclaimed pine comes from historical buildings. Using reclaimed pine flooring in your home has eco-friendly benefits and brings a historic touch and luxurious look to your home. Photo courtesy of Stromberg Moore Hardwoods; Photo by Tim Brown Photography
The HGTV Urban Oasis 2011 powder room's maple flooring brings warmth against the black-and-white linear mosaic tile wall. Even though hardwood flooring isn't necessarily the first choice for bathrooms, it can work well in a powder room without a shower.
Red oak is one of the most popular flooring choices available because of its ability to coordinate with any design style. The reddish tones add to its beauty and its resistance to wear makes it a great option for high-traffic areas, such as a living room. Photo courtesy of Shaw Floors
Ebonizing wood is a simple way to add luxury to a space. The dark, opaque look complements many design styles but really stands out in a neutral, contemporary space. Dark hardwoods, such as oak, cherry and walnut, create the best sleek black look. Design by Linda Sullivan
The natural features of reclaimed wood bring warmth, and it's a stunning choice for a bathroom once it's treated. Reclaimed wood can be incorporated in traditional and contemporary spaces. Photo courtesy of Mountain Lumber
If you want an exotic look, choose Brazilian cherry wood. The multitude of colors in the grain gives the floor a mosaic look. Aside from its visual appeal, its sturdy nature and affordable price make it a popular choice among exotic hardwoods. Photo courtesy of Lumber Liquidators
White Oak Puzzle Piece
A conversation starter doesn't have to be a piece of art. Designer Jamie Beckwith designed The Enigma Hardwood puzzle piece flooring to challenge the traditional wood-plank flooring. It comes in 16 different patterns with six unique stain choices for a custom look.
To bring high style to your space, choose eucalyptus hardwood flooring. Its fast growth and high availability makes it an eco-friendly and budget-friendly choice. Pair the flooring with white furnishings to create an elegant look. Design by Troy Beasley
Stromberg Moore Hardwoods' Douglas fir plank flooring brings a comfortable, inviting feel to your home. The stain in the fir showcases the detail in the grain, delivering a striking design aesthetic to your space. Photo by Craig Wolfrom Photography
You can add a lot to a home by updating the flooring Gudell explains. Using one or two materials throughout can add to the flow of a space and make a huge difference aesthetically. Given the plethora of flooring options on the market, you will appeal to more buyers by making that investment rather than installing new kitchen cabinets.
What projects give homeowners the biggest return on investment regardless of location and home type?
Mid-range bathroom upgrades, new windows and extra square footage, says Gudell. You almost always get more money out of it than what you put in.