Home improvement is a broad term that encompasses renovations to your living space, such as kitchens and bathrooms, or your backyard. It also refers to upgrades made to your home’s energy efficiency, including installing new windows and doors, or adding insulation. The type of home improvement you choose depends on your goals and budget, as well as the overall resale value of your home. However, some projects may end up costing you more than they’ll pay off when it comes time to sell.
According to a report from the National Association of Realtors (NAR), remodeling activity surged during the pandemic, as homeowners sought to increase their livability while they were stuck indoors. But, the NAR report notes that renovations didn’t just boost comfort levels; they also increased resale values.
A common misconception is that you’ll always get back more than you spend on any kind of home improvement project, and this couldn’t be further from the truth. In fact, some improvements have no return at all, and even those that provide a high ROI have varying values from one market to the next.
The best way to maximize your return on any home improvement is to do a combination of projects. This will give your home the best chance of having a strong appeal to potential buyers. In addition to the obvious cosmetic projects, such as fresh paint and updated fixtures, consider making upgrades that are expected by today’s buyers. For example, updating a kitchen or bathroom with new cabinets and countertops is an easy and affordable way to add value to your home.
Another area where you can improve your ROI is by upgrading to energy-efficient appliances and fixtures. New heating and cooling systems will not only help you save money on your utility bills, but they can also qualify for tax credits when you sell your home.
When it’s time to make a change, be sure to speak with a real estate professional in your market about what kinds of home improvements have the greatest impact on resale value and which aren’t worth the expense. It’s also a good idea to work with a contractor who has experience in your specific type of project.
Beware of rip off scams
When you work with a professional to complete any home improvement projects, be sure to read your contract carefully and keep a copy for your records. The contract should include a description of the work to be performed and the materials to be used, as well as the date(s) when the performance will begin and when it will be substantially completed. The contract should also contain the terms and conditions of any warranties for materials and workmanship.
It’s also important to find out whether the contractor is licensed and insured in your area. You can check for licensing by visiting the Maryland Department of Labor, Licensing and Consumer Services website. You should avoid contractors who won’t provide you with copies of their license, certificate of insurance and business references.