Home improvement is a common part of being a homeowner. It can take the form of fixing up a bathroom or kitchen, adding on a garage or other outbuildings, installing new flooring or paint, and much more. While some homeowners undertake these projects to boost their property value and increase the chances of a sale, others renovate in order to make the home more livable for them and their families.
In general, home improvements tend to produce a higher return on investment than other types of investments. However, the exact ROI percentage depends on what type of project is undertaken. It is also important to note that some home improvements can be expensive and can cause problems in the long run if not done correctly.
There are a few certainties in life: death, taxes and if you’re a homeowner, a constant stream of home repair or improvement projects. Some are urgent, such as an electrical problem or a leaky roof that just can’t be put off. But many of them are less critical but still want to be taken care of, such as adding a master suite or updating the front entryway.
It’s no wonder that in these unsettling times, Americans are spending more time at home and taking on more home improvement projects. In fact, 3 in 5 American households have taken on a project since March 1, according to a recent NerdWallet survey. The categories of work surging the most are outdoor projects, such as building decks or fences, as well as work on landscaping and the yard.
A number of factors have driven the rise in home improvement spending. One is rock-bottom interest rates, which have made loans affordable for more people. Another is the sense of security and stability that come with making improvements to a place where you live, especially in unsettling times like these. Finally, the popularity of television shows that show step-by-step remodeling or renovation have helped popularize the idea of DIY projects and encouraged many Americans to tackle their own home repairs.
Whether your home improvement projects are driven by necessity or by desire, there are many ways to pay for them. Some homeowners use savings, but credit cards and personal loans are other popular options. A secured loan, such as a home equity line of credit or second mortgage, can have lower interest rates and is tied to your house’s value.
It’s also important to get any home improvement contracts in writing. This will protect you and the contractor in case something goes wrong, such as a dispute over payments or materials used. The contract should contain a description of the work to be performed, a payment schedule and as much detail as possible about materials (including brands) and workmanship. It should also include a timeline for when the work will be substantially completed. It should also state whether any warranties for materials or workmanship are included in the contract.