Home Improvement – Be Realistic About the Costs of Your Projects
Home improvement can be a great way to update and beautify your property. It can also increase the value of your home. But it is important to plan ahead and be realistic about the costs. There are some projects that will never return the amount of money that you invest. The best approach is to choose a few projects that will benefit your lifestyle and increase the overall appearance of your home.
In 2017, homeowners spent more than $567 billion on home improvements, according to the remodeling loans platform Angi. This was a record high and reflects higher house prices, low inventory of new homes for sale, and a desire to make their existing homes more comfortable and functional. Aging homeowners (those age 55 and over) were a major driver of home renovation spending in 2017, contributing nearly half of all the dollars spent on improvements.
While it’s always nice to make your home more comfortable, some improvements do not add value. It is important to consider the resale value of your home and what upgrades are in demand in your area before diving into a project. The most popular projects include a new kitchen, bathroom, deck, and garage conversion. Other popular projects include replacing doors and windows, painting, adding a fence, and upgrading your heating, ventilation, and air conditioning system (HVAC).
Some projects may provide a better return on investment than others. For example, replacing your front door or adding a patio are relatively inexpensive but can have a significant impact on the curb appeal of your home. Other projects that typically yield a good return on investment include installing an energy-efficient furnace or replacing your roof.
When choosing a contractor, be sure to get a written contract before work begins. The contract should list the name, address, and MHIC license number of the business, as well as a detailed description of the work to be performed. In addition, a detailed payment schedule should be established with the contractor, including an initial down payment and periodic incremental payments until the work is complete and all inspections and certificates of occupancy have been obtained.
When it comes to financing your home improvement project, personal loans and credit cards are often the best options for small-to-midsize projects. Home equity loans or lines of credit are better for larger-scale improvements. Before you begin a home improvement project, talk with your mortgage broker or bank to learn about what the estimated costs will be and what your options are for financing. Remember, if you go into debt for a home improvement, you will not only pay for the project itself, but you’ll also pay interest that could significantly increase your total cost. This is a costly mistake that many people make.