Choosing Home Improvement Projects That Will Add to Your Home’s Value
Home improvement is a multibillion-dollar industry that includes retailers selling building materials, appliances and decor, as well as contractors, tradespeople and others who help to remodel or upgrade homes. It has enjoyed excellent growth results in recent years, including during the COVID-19 pandemic when consumers focused on making their houses more comfortable and safe. However, the pace of home improvement activity appears to be slowing.
A big reason may be that household budgets are being squeezed by rising inflation, which is hitting all areas of spending, including home renovation. For example, this week both Lowe’s and Home Depot reported a dip in sales of bathroom upgrades, such as tub-to-shower conversions, indicating that homeowners are putting the brakes on more ambitious projects and opting for cheaper do-it-yourself fixes.
When it comes to home improvements, there are many things you can do to make your house more appealing and functional, but some projects are better than others in terms of boosting resale value. To maximize the return on your investment, look for projects that have a track record of increasing home values and don’t overdo it. For example, installing a pool or fountain in your backyard is fun but won’t necessarily boost your home’s value, and it may detract from the appeal of your neighborhood.
In addition to choosing the right projects, it is also important to think about how you will pay for the renovations. You can save up for the work yourself or use a savings account, a personal loan or a credit card that offers rewards. If you choose to finance the project, it is important to research multiple lenders and compare rates and terms before selecting one. In some cases, you may be able to find a government-backed loan program that can pay for part or all of your renovation costs.
It’s also a good idea to consider the needs of your family before renovating. For example, converting your basement into a primary suite is a great way to add living space to your home, but it’s probably not an essential improvement if you want to sell your house in the near future.
Finally, if you are planning to sell your house in the near future, talk with a real estate agent about which home improvements will likely add value. This can help you prioritize projects and avoid those that won’t add a lot of extra dollars to your asking price.