Home improvement is an industry that includes the sale of building materials, appliances and decor to help consumers improve their homes. It also encompasses the services of contractors, tradespeople and other workers who install, repair or modify homes. This market achieved excellent growth results in recent years, particularly during the COVID-19 pandemic, when homeowners focused on upgrading their houses.
Consumers have many reasons for renovating their homes, including addressing safety issues or making upgrades to make the house more enjoyable. Many people also use the opportunity to make their homes more energy efficient. A new heating system, a roof replacement or upgraded insulation can all help reduce utility bills and increase the comfort of a house.
The popularity of DIY television shows and websites devoted to home improvement has helped spur demand for some products. In addition, the higher home prices that have resulted in more equity are helping some homeowners pay for renovations. And, a growing number of older adults are financially equipped to take on such projects, contributing 25 percent to the overall homeowner spending in 2017.
Regardless of the reason for a project, it’s important to consider ROI (return on investment). The return is the percentage of the cost that you receive in higher home value when you sell your house. A high ROI is the main goal of most home improvement projects, but it’s not always possible, especially for expensive renovations like adding an additional bathroom or a kitchen remodel.
To maximize your return, opt for a midrange project that will still have a strong visual impact but won’t break the bank. For example, refreshing a shower area with new tile or replacing vanities and toilets are less expensive and can have a big impact on your home’s aesthetics.
Another way to increase your home’s value is by adding a bonus room or outdoor living space. Depending on your location and the housing market, these amenities can add up to 30 percent to your home’s value. And, with today’s busy lifestyles, many families are seeking out added living spaces to accommodate everyone.
One thing to keep in mind is that overly lavish projects may be a turnoff for potential buyers. For example, installing a hot tub or a fountain in the backyard will likely detract from your home’s overall appeal if most of your neighbors’ yards are more modest.
Before you start any work, get a written contract that lists the complete project, including all charges and fees. Check whether the contract contains an arbitration clause and how the contractor plans to resolve disputes. The contract must also state the minimum deposit required by law, the payment schedule and as much specificity as possible regarding the work to be performed. The contract should also have the contractor’s name, address and MHIC license number preprinted on it. Avoid any contractor whose contract does not meet these requirements. This will protect you from any misunderstandings or disagreements about the work to be done.