How Black Homeowners Are Using Home Improvement Projects to Boost Property Values

More Black homeowners are using high ROI home improvement projects such as kitchen upgrades, modernized and stronger entry points starting with the garage, and energy efficiency improvements. Outdoor living enhancements like kitchens and native gardens add to exteriors and help make previously underused spaces more functional. 

According to the Urban Institute, 2022 data showed Black homeowners’ average home value was $318,000, yet the average value is $423,000 for all homeowners. Home equity is the primary driver of Black wealth, making timely home upgrades a vital part of building assets. 

Instead of one big gut renovation, people are strategically making targeted upgrades that enhance the home little by little without being too disruptive to home life.

How Can Home Improvement Projects Improve Black Homeowner Wealth?

Over 90% of Black American wealth gains came from homeownership between 2013 and 2022, according to the National Community Reinvestment Coalition. Become a part of this positive statistic by incorporating more sustainability, focusing on commonly used rooms like bathrooms and kitchens, and giving your home a red-carpet-worthy exterior makeover.

Go Green to Save Your Green

Focusing on energy-efficient home renovation is a financial gift that keeps on giving, which Black homeowners will notice when utility bills come in post-installation. Rebates from Energy Star-certified upgrades, ranging from heat pumps to appliances, can help offset initial expenses; check state and utility programs for specific programs. 

Taking steps to mitigate home risk is viewed favorably by home insurance companies. They will likely offer premium discounts, and energy-efficient windows alone can lead to a 5-10% decrease, according to Lonewolf Exteriors.

Once those double-pane impact windows are installed, you’ll have better home insulation that prevents heat loss and reduces HVAC usage. Sealed points and thicker glass improve safety since those windows are harder for storms and potential thieves to shatter.

Where Should I Start and Why?

Converting to a walk-in shower with easy-to-clean and aesthetically pleasing natural stone is a popular bathroom remodeling solution. Save space by incorporating built-in storage in this new shower. If you have extra space, consider adding a separate clawfoot tub.

Modernize an older kitchen by resurfacing or replacing dated cabinet fronts, as there’s no need to remove the entire thing if the structure is still sound. You can’t go wrong with new countertops, especially those made from granite or quartz. 

Black parents and children can literally breathe easier and create a safer zone with no open-flame cooking with an induction stove upgrade. 

Should Home Remodeling Extend Outdoors?

According to First Option Mortgage, exterior upgrades have the highest ROI of all, with about 70% to 100% back for curb appeal projects. Therefore, if you don’t take advantage of upgrading your garage door or siding, and avoid regular power washing, you’re losing out on projects that pay for themselves.

Outdoor home improvement projects also include:

• Landscaping 
• Pergolas
• Pathways
• Custom mailboxes
• Deck/patio addition

While a grill is a must for the regular cookout, Black homeowners can boost outdoor cooking and buyer appeal by adding a fire pit and pizza oven. Speaking of food, build out a native garden to rival what your Southern grandparents may have grown, as more Americans are showing interest in food self-sufficiency to cut grocery costs. 

What Modern Trends Should I Consider?

Americans have gotten more savvy about improving the functionality of previously unused space in their homes. More Black homeowners can finish that basement or attic to turn it into a usable space for a :

• Bedroom
• Home office
• Separate apartment 

Don’t forget about tech-savvy buyers who expect a home to be incorporated with smart home technology. Start adding smart thermostats and motion sensor lighting. Your security system can also be attached to Smart sensors that send you alerts and camera footage regardless of where you are.

What About Appraisal Lowballing?

Black home owners are about twice as likely to get a lower appraisal for the same home compared to white homeowners. This disparity increases even when a well-maintained, renovated home is in a majority-Black neighborhood. Some black homeowners have gone as far as using a “whitewashing” strategy involving removing family photos and art to improve the likelihood of an unbiased valuation. 

However, more are fighting back against biased low appraisals by submitting a reconsideration of value (ROV) that has evidence of comparable sales. Black homeowners can also get a second appraisal with a different firm and always keep copious notes of renovations and improvements in a package to present to an appraiser before the inspection begins.

Frequently Asked Questions

What Is the “30 Rule” in Home Renovation?

This rule states that homeowners should spend 30% of what the home is worth right now on repairs and upgrades. Using this calculation can help avoid making too many changes that are good for the neighborhood while keeping your ROI expectations realistic. 

What Home Improvements Can be Written off on Taxes?

Making the right home upgrades can be a tax deduction at the federal and certain state levels. If you work from home and have a dedicated home office, its overall maintenance from utility bills to upgrades is a deduction.

Other home improvements deductions include:

• Medical care and accessibility
• Energy efficiency
• Historic home renovation
• Rental property maintenance
• Disaster repairs

Can I Deduct the Cost of Remodeling my Kitchen?

A standard kitchen renovation doesn’t qualify as being tax-deductible. However, a specific adjustment, such as modifying a kitchen for a home office or medical necessity, may allow you to qualify some of it for deductions or credits. 

Your kitchen home office space must be exclusively and regularly used for business to qualify, and you could only deduct the percentage of the cost for that particular area.

Medical-related kitchen upgrades may include lower counters and wider pathways for wheelchair access.

Build Black Wealth in a Beautiful Home

Strategic home improvement projects can help more black homeowners mitigate lower appraisals and create a cozy home that will catch the eye of a top buyer. Start with popular spaces like kitchens and bathrooms, and ensure your exterior is polished enough to encourage somebody to go past the surface and look inside.

Learn more about home and lifestyle improvements by reviewing our website for other insightful content.