There are few certainties in life, but for homeowners there are a few that stand out: death, taxes and home improvement projects. Whether you’re looking to add more curb appeal with a new paint job or you need to fix that leaky roof, these tasks can quickly add up and become expensive. Fortunately, a few key tips can help you keep your project costs under control.
First, make sure you understand what type of home improvements are likely to add value and recoup cost. The easiest way to do this is by talking with a real estate agent who can give you a sense of what the market looks like in your neighborhood. This can help you avoid spending money on upgrades that will not pay off if the time comes to sell your home.
Another important step is to decide how you’ll finance your project. A few of the most popular options include cash, personal loans and credit cards. However, Reyes says it’s a good idea to have at least three to six months’ worth of emergency savings in place before you pull the trigger on any major home renovations. If you don’t have the funds to cover a project upfront, he suggests considering a home loan. These loans are typically backed by the government and can offer better rates than credit cards. They also have a fixed term and payment schedule, unlike unsecured personal loans or credit cards.
The American Housing Survey found that 76% of homeowner’s projects are paid for by using cash from savings. The remaining 24% are covered by various financing options, including cash-out refinances, mortgages, home equity loans and contractor arranged credit.
If you’re planning to do a more substantial project, it’s important to find a reputable contractor. A reputable contractor will have a current license, workers’ compensation and general liability insurance. They should also be members of a professional organization and have business references that can be verified. You should never hire a contractor who is unwilling to provide you with proof of these credentials.
A reputable contractor will be able to give you detailed estimates that clearly list all costs and services. In addition, Maryland law requires all contracts for home improvements to be written and signed by both the consumer and contractor before work begins or any money is paid. In addition, the contractor must have their name, address and MHIC number preprinted on the contract.
While it’s easy to get caught up in the zeitgeist and want to upgrade your home with the latest technology or add a koi pond, don’t lose sight of the fact that most projects will not pay off in terms of added resale value. Instead, try to focus on improving the functionality of your home – for example, adding a master suite that includes a private bathroom or extra living space. In this way, your home improvement will be a win-win for you and any future buyers.
