The Risks and Benefits of Home Improvement
Home improvement is an investment in a home that pays dividends in a better-functioning, safer, more comfortable living space for the family and, ultimately, higher property values. It also creates jobs in construction, boosts local economies through markets for materials and goods, and improves the overall quality of a community. However, it is not without its risks and potential pitfalls. If homeowners attempt too many or too complicated projects, they may end up hurting themselves or their homes—and wasting money. It’s important for homeowners to understand the costs and benefits of different projects before they start.
Even though professional remodeling and some DIY projects froze during the COVID-19 pandemic, some categories have experienced a surge since then. For example, deck construction is up 275% and fence construction is up 144%. One reason for this may be that the housing market has shifted toward the suburbs, where these types of home improvements are popular.
In addition, rock-bottom interest rates make renovating a home more affordable than ever. It’s also worth noting that the biggest spenders on home renovations are homeowners 55 and older. This group represents half of all home improvement spending. Those age 50 to 64 spent nearly twice as much on these projects last year as those under the age of 45.
Aside from the financial benefits, homeowner satisfaction with improved homes has jumped during and after renovations. The National Association of Realtors reported in 2022 that 83% of surveyed homeowners said they were satisfied with their homes after remodeling.
Depending on the project, it is sometimes wise to hire professionals. Some examples of jobs best left to a professional include electrical work, plumbing and cutting through walls. It’s best not to try to take on these tasks on your own unless you have the right tools and knowledge. If you’re not sure what you’re doing, it’s a good idea to ask a friend or neighbor for advice or to simply get outside help.
It’s also important for homeowners to keep in mind that home improvement doesn’t always increase a home’s value. This is especially true for improvements that exceed what neighbors have done. Buyers typically look at comparable properties in the area when determining how much to pay for a house. Therefore, if your improvements put your home well above the average for the neighborhood, it’s not likely that you’ll receive high offers on your house. However, if your improvements are more modest, you’re more likely to see some returns on your investment.