Home improvement isn’t just a way to make your house a better place to live, but it can also help increase its value when you decide to sell. But before you start swinging a hammer or running to the nearest hardware store, it’s important to know what renovations are likely to add value and which ones will actually cost you money.
The term home improvement can be a little confusing, but in general it refers to anything that makes your home more attractive, functional or comfortable. This can include things like installing new kitchen cabinets, replacing flooring or painting the exterior of your home. It can also refer to more significant projects such as putting in a new pool or building an addition.
Many homeowners undertake home remodeling projects with an ulterior motive: they hope that the upgrade will improve their chances of selling the house in the future. After all, who wouldn’t want to buy a home with a state-of-the-art kitchen or a brand new basement? Unfortunately, not all home improvements are created equal. In fact, some can even detract from a home’s value.
In the last year, homeowners spent $567 billion on home improvements, according to Harvard University research. While the elevated prices of construction materials may have deterred some, the desire to enjoy a better home environment and the desire to increase a property’s resale value are still strong motivators.
The biggest driver of home improvement spending is the aging population. People over the age of 55 were responsible for more than half of all home improvement spending in 2017. This is partly due to the fact that they have more equity in their homes and can afford to spend more on renovations, but it’s also because the rock-bottom interest rates are making it easier to finance a project.
If you are planning on making a major renovation, it’s best to consult with a real estate agent or other home experts to get their opinion on whether the project will be worth your time and money. Also be sure to stay within your budget and don’t go into debt. Not only does this limit your options for future projects, but it’s not good for your credit. If you do have to take out a loan, be sure to use the lowest possible APR and pay it off as quickly as possible.
Don’t try to outpace the rest of the neighborhood with a renovation that will set your home apart from your neighbors in a negative way. For example, if your neighbors have standard vinyl siding, don’t install an expensive brick front porch. And be careful about over-personalizing your home, such as with overly bold light fixtures or elaborate landscape designs. Instead, stick with basic updates that will appeal to a broad range of buyers.