Home improvement is the repair, maintenance or improvement of residential real property, such as the house itself, the yard or any other outdoor area. The industry comprises companies that provide materials, appliances and decor for home improvement projects, as well as contractors, tradespeople and others who help to install, build or modify a residence. The home improvement market has experienced strong growth in recent years, particularly during the COVID-19 pandemic.
A common reason homeowners undertake home improvements is to add value to the property. However, it’s important to remember that not all home renovation projects will boost your home’s resale value. In fact, many projects don’t even deliver a return on investment. Sparkling bathrooms, kitchen remodels and basement upgrades are popular, but they typically only increase the cost of your home by a few thousand dollars at most.
Depending on the type of project and its cost, some home improvement expenses may be tax deductible. For example, if you are improving your home’s energy efficiency with new windows and insulation, the costs can be offset by the federal tax credit. The same goes for installing a new water heater, as these types of projects typically save you money on utility bills.
According to a September survey by NerdWallet, the majority of homeowners who have undertaken home repairs/improvements were easily able to pay for them without tapping into savings or going into debt. The same survey found that the average project cost was around $5,500, and that most owners spent less than $25,000.
While it is possible to renovate your home purely for resale value, your own comfort and enjoyment should always be taken into consideration. If you decide to remodel solely based on what will make your home more appealing to buyers down the line, you could end up with a “showhome” that doesn’t feel like a place you’d actually want to live in.
Homeowners also remodel for a variety of other reasons, such as updating worn fixtures and appliances or adding a deck. While some projects, such as a new roof or a complete kitchen remodel, are likely to add value to your home, other enhancements have a more immediate impact on the quality of your life. For example, if you have a leaky faucet or sagging gutters, fixing them is an essential home improvement project that should not be ignored.
A successful home improvement project often begins with careful planning and research. This can be especially true for larger, more expensive projects. It’s also essential to find a qualified contractor. You’ll want to be sure the contractor you hire is licensed, insured and bonded. In addition, it’s a good idea to check references and ask friends and family members for recommendations.
The most popular home improvement projects are bathroom and kitchen remodels, followed by basement renovations. However, the most effective projects are those that address a specific need or problem. For example, if you have an aging parent living with you, adding a bedroom and bathroom can significantly improve their quality of life.