Home improvement is a wide range of projects that improve or add value to a home. This may include interior and exterior remodeling, landscaping, installing new kitchen appliances, and more. Home improvements are generally done to increase a home’s functionality and comfort, and may be undertaken for personal enjoyment or as a means of increasing its market value. Home improvement can be expensive, but it is often a good investment. Before completing any major home improvement project, it is important to understand what types of improvements will bring the biggest return on investment. This will help you plan your budget and decide which projects are worth the expense.
In addition to saving for a large renovation, homeowners may choose to take out a home improvement loan to finance the work. These loans can offer lower interest rates than a credit card, and can also have flexible repayment terms. However, it is important to compare the different options available before choosing a lender. Factors such as fees, repayment periods, and APR can vary significantly by lender.
When deciding which home improvements to undertake, it is important to consider the long-term impact on your property’s resale value. Some improvements are more likely to add value than others, such as those that appeal to the largest number of potential buyers. It is also a good idea to keep your upgrades within the style and price range of other homes in the neighborhood.
According to the 2021 American Housing Survey, 78% of home improvement projects were paid for with cash. However, many homeowners lack a deep well of savings to draw from, and as projects become more expensive, funding choices change. For example, 20% of homeowners who funded a major home improvement project in the past two years reported having to sacrifice discretionary spending or sell items, while 14% had to tap into or exhaust emergency savings, and 8% borrowed against their equity.
A recent study by NerdWallet found that nearly all (95%) homeowners are considering taking on some kind of home improvement project within the next two years. However, many are planning smaller projects such as painting or updating light fixtures. The report noted that 84% of surveyed homeowners felt satisfied with their homes following a home improvement project.
Home improvement is a big business. According to the nation’s two largest home improvement retailers, Lowe’s and Home Depot, customers are putting off major upgrades and focusing on cheaper do-it-yourself fixes. The industry’s pullback comes after a pandemic-era renovation frenzy, as households upgraded both newly purchased homes and those they had been living in for some time. Whether you plan to stay in your house another decade or sell it soon, understanding which projects will bring the best return on investment can help you decide where to put your money.