Home improvement is the remodeling, altering, renovating, repairing, restoring, and modernizing of any part or all of a residential building. This includes kitchens, bathrooms, bedrooms, living rooms, basements, garages, patios, fences, and more. Home improvement is one of the most popular pastimes for homeowners and can add value to your home. But, not all home renovations are created equal, and some may even cost you more than they add in resale value. Before you jump into a project, take the time to learn more about how and why they may or may not work in your favor.
Americans love to improve their homes, helping drive revenue for large retailers such as Home Depot. However, recent sales data suggests the market may be reaching a peak and will begin to decline in 2023. Regardless, there are still a few projects that can provide great returns.
More than half of homeowners who have done home improvement projects say they were able to pay for them without tapping into savings or going into debt, according to the September 2023 American Housing Survey (AHS). But, only 52% of those same homeowners said they had saved money specifically for those home improvements.
In addition to saving, some home improvement projects can be financed with loans or credit cards. If you’re planning to use a loan, be sure to compare options. For example, some lenders offer special loans for home renovations with lower interest rates than other mortgages. Another option is a home equity line of credit (HELOC), which uses your home as collateral and allows you to access funds when you need them.
Many contractors will have different bids for the same home improvement project. Don’t just focus on price, though. Consider the contractor’s experience, reputation, and ability to complete the job on time. Often, you will find that the best contractor is not always the most expensive.
Before you start any major home improvement project, speak with a real estate professional or other experts to learn what will actually add value to your home. They will also be able to help you determine which projects are ones to avoid, and which ones will give you the biggest return on investment.
While you may love that new hot tub or fountain, not every potential buyer will. If you’re planning to sell in the future, be careful not to overspend on high-end additions that will detract from your home’s resale value. Also, remember that your house is not an extension of your personal taste. If you want to get the most out of your home, keep it in line with your neighborhood’s aesthetic. If not, you might wind up with an unappealing property that turns off buyers. Moreover, spending money on a home improvement project that you don’t plan to keep can lead to debt and stress you don’t need in your life.