Home improvement is the process of improving or making additions to a home, such as painting, renovating a bathroom or kitchen, refinishing wood floors or adding an extension. Home improvements can also include work to make a house safer or more energy-efficient, such as installing new heating systems or upgrading windows. Homeowners usually undertake home improvement projects to improve the functionality and appeal of their homes, or to increase their resale value. However, not all home improvement projects are created equal. Some are more likely to add value to a home than others, and some methods of paying for projects can end up costing homeowners more than they may be able to recoup when it comes time to sell the house.
In the past two years, a lot of homeowners have been doing some serious remodeling. However, a new report shows that this home improvement frenzy has started to slow down, at least when it comes to bigger, more expensive renovations. In fact, both Lowe’s and Home Depot reported this week that they are seeing a cooling in the number of people converting their tubs into showers, as well as other ambitious DIY home improvements such as replacing kitchen cabinets.
According to a new NerdWallet survey, most homeowners (95%) plan to complete at least one home improvement project in the next couple of years. Some of these projects are fairly straightforward and cheap, such as painting rooms or updating light fixtures. But a few of these projects can quickly get out of hand, including adding a master suite or turning your basement into a recreation room.
If you’re planning to do a big renovation, it might be worth talking to a real estate agent first to find out how much those projects will boost your resale value. Depending on the neighborhood, a lot of high-end improvements can be off-putting to potential buyers. They may feel that your upgrades are too personal or do not fit in with the style of other houses in your neighborhood, or that they are just not worth the extra price you will have to ask for your home.
While it is tempting to go all out on these upgrades, you should always keep in mind the fact that your home is an investment. If you care for and improve your home, it will pay you dividends in comfort, utility and resale value. On the other hand, if you neglect your home, it will only depreciate in value. Taking out a loan to pay for these projects can be risky, especially if you are not sure how long you will be in your home. A better option is to use your savings or if necessary, turn to a credit card with a fixed interest rate and a manageable repayment schedule. If you do decide to take on a loan, make sure that it is strictly for your home and not for unnecessary purchases or frivolous activities.