Home improvement is the process of renovating one’s existing home. It includes any work that upgrades a house’s interior or exterior, such as installing new fixtures and painting, or creating an addition like a deck or fence. It can also include updating or replacing existing heating, ventilation and air conditioning (HVAC) systems, as well as improving energy efficiency. Home improvements are often carried out for a variety of reasons; personal preference and comfort, maintenance or repair work, adding space through an expansion or renovation, making the home safer, or increasing its value through technological advances.
There are many ways to fund a home improvement project, depending on the size of the project and your own financial circumstances. According to the American Housing Survey, the vast majority of projects are paid for with cash from savings, but more expensive projects may be funded through home equity loans or a combination of sources including credit cards and contractor-arranged financing.
Those looking to sell their homes within a few years might prioritize projects that add the most immediate value, such as opening up main living spaces or upgrading kitchens and bathrooms. However, homeowners’ primary motivation for home improvement is not to recoup costs when they sell, but rather to make their houses more comfortable and enjoyable places to live.
According to the National Association of Realtors 2022 Remodeling Impact Report, the pandemic was not a major driver of home renovation activity, with most people already planning to renovate prior to the pandemic. Other key factors included a desire to enjoy the benefits of upgraded living spaces (69%), improving livability and functionality (53%), and simply wanting a change (39%).
The most popular home improvements for the year just ended were building or replacing driveways, landscaping or fences. These were followed by projects related to plumbing or electrical issues, room additions or remodeling, and kitchens and bathrooms. In terms of return on investment, only a few projects, such as garage door replacement or adding an outdoor living area, had ROIs above 100%.
For those seeking to complete a home improvement project, the first step is to develop a budget and determine how it will be funded. Sticking to a budget is important, especially since a few unexpected expenses can quickly derail a project. This is why it is a good idea to allow a 10%-20% buffer in your budget for cost overages. It is also a good idea to shop around and find the best prices for materials and labor. To help with this, a free online tool like HomeCost Estimator can be used to help estimate the cost of a home improvement project. Finally, when choosing a home improvement contractor, it is always a good idea to get references from past clients and check them out. Also, homeowners should always be sure to obtain a home improvement permit when necessary for their project in New York City, Nassau, Suffolk, Putnam or Westchester counties.