Home Improvement – Increase Your Home’s Value Or Detract From It

Home improvement is a popular way to improve the value of your property. Many homeowners also undertake home improvements for their own enjoyment and satisfaction. However, it is important to understand that not all projects will increase a home’s value. Some projects may even detract from it.

The types of home improvements that will increase your home’s value are those that are considered structural. These include adding on, finishing raw space, and making structural changes to your house, such as replacing windows or doors. Improvements that add style are more likely to detract from a home’s value, because style fads change and what is trendy today will look dated in ten years or so.

According to the American Housing Survey, households in the highest income bracket were the most active homeowners in home improvement, spending on average $5,400 per project in 2017. While a small percentage of owners, they accounted for over half of all homeowner improvements in the nation. Among high-spending households, the most common project was a bathroom renovation, followed by a kitchen remodel and basement finish. Other popular projects were a deck addition and replacing the roof.

Generally, the more expensive projects were paid for with cash from savings or with sources such as a cash-out refinance, a home equity loan, contractor arranged financing and credit cards. “Something else,” which was chosen by 6% of respondents, likely included personal loans or borrowing money from family members.

While the number of homes improved in 2021 has fallen from a record peak, the overall market is still ripe for homeowner remodeling and repairs, says Anderson. This is partly because of a rising population of older homeowners who are more financially equipped to undertake larger projects, and rock-bottom interest rates that make it cheaper to borrow for improvements.

Most homeowners will only get a return on their remodeling investments in the form of higher home values when they eventually sell their houses, and even then the returns are not always great. A sparkling bathroom overhaul is the most popular renovation, but it typically only pays back about 64% of the cost when it comes time to sell. Big-ticket kitchen and basement renovations also tend to recoup less than the cost of their initial investment.

Before hiring a contractor to do any work on your home, it is essential that you get all the terms and conditions of the contract in writing. In Maryland, the Home Improvement Law requires that all contracts for home improvement be written and signed by both the consumer and business before any work is done and payment made. The contract should also have the contractor’s name, address and MHIC license number preprinted on it. In addition, the contract should contain any warranties that the contractor offers. Homeowners should only hire contractors who are licensed, insured and have good references. They should avoid contractors who use unlicensed subcontractors or who do not have a physical business location.