Home improvement is a popular pastime for many homeowners and can improve the comfort, safety, and beauty of your home. It can also increase the value of your home, making it more attractive to potential buyers. But it’s important to know what improvements will add the most value and which are a waste of money. Here are some things to consider before taking out a loan or breaking out the sledgehammer.
What are the most common home improvement projects?
The simplest and most cost-effective way to improve your home is to paint. Freshening up the color scheme can give your home a clean, updated look, and it’s a great way to brighten up drab rooms.
Another easy project is replacing old light fixtures and appliances with new ones. These simple updates can make your home more energy-efficient and can also save you money on utility bills.
If you’re planning a more involved project, it’s a good idea to hire a professional. Hiring a licensed contractor will ensure the work is done correctly and safely. But before hiring one, be sure to compare several different contractors’ bids on the same project. Prices vary, but you should also consider the contractor’s experience, reputation, and length of time in business.
Home Improvements That Don’t Add Value
While some home renovations may seem like a no-brainer, there are many others that won’t have the same return on investment. For example, adding luxury upgrades such as marble countertops and high-end appliances may not appeal to a wide range of buyers. Similarly, converting a garage into living space will only add value to your home if it’s in line with other homes in your neighborhood.
Fortunately, there are many simple home improvements that can provide great returns on your investment. A new front door, for example, is one of the highest-ranked improvements in the Cost vs. Value report. Other smart projects include adding trim around doors and windows, updating lighting fixtures, and installing a wood deck.
Before committing to any home improvement project, be sure to consult with a real estate agent or home appraiser to get an idea of what your house is worth. You should also speak to a home insurance specialist about any changes you plan to make, as they might impact your premium.
How can I finance my home improvement project?
If you have accumulated equity in your home, you may be able to borrow against it using a home equity line of credit (HELOC) or a cash-out refinance. But if those options aren’t available, you can try a personal loan or even a credit card. Just be aware that these types of loans typically have higher interest rates than mortgages and can put you in debt for years to come.
If you’re going to borrow money to pay for a home improvement project, Reyes recommends carefully comparing several lenders and preparing detailed budgets for the work. He also stresses that it’s crucial to have an emergency fund of three to six months’ worth of expenses saved before spending money on home improvements.