Home Improvement and the Return on Investment
Home improvement is a popular hobby for many homeowners and can have a substantial impact on the value of your property. Whether you are looking to increase the functionality of your house or just want to make it look more updated, there are a number of ways to do so that will not break the bank. However, it is important to understand that some projects may have a better return on investment than others.
There are a number of different things that fall under the umbrella term home improvement, from simple painting and cleaning jobs to a full-blown kitchen renovation. Regardless of the scope of the project, a thorough plan must be developed before beginning work in order to stay on schedule and budget. The key to any successful home improvement project is to set realistic expectations about what can be achieved in the allotted time and to hire contractors that are well-versed in the necessary skills and techniques.
According to the American Housing Survey, about 76% of home improvement projects are paid for with cash from savings. The remainder of the costs are covered by sources such as credit cards, contractor arranged financing, home equity loans and cash-out refinancing. In some cases, homeowners may also be able to access government grants for home improvement.
Keeping up with the maintenance on your house is one of the easiest and most inexpensive ways to improve its value, as it shows potential buyers that you care for your property. In addition, it is important to fix any problems as they arise. Neglected repairs such as a leaky roof or faulty electrical wiring can lead to major issues that will cost significantly more to repair in the future.
If you are considering doing a larger home improvement project, it is wise to consult with an architectural firm or real estate broker to determine what the return on investment is likely to be. This will help you to avoid making costly mistakes that could lower your property’s value and prevent you from achieving the desired results.
A good place to start when determining the return on investment for your home improvement project is to look at what other similar homes in your neighborhood are selling for. Then, decide if you would be willing to pay for that type of project at current market prices.
Another great way to improve your home’s value is by making it more energy efficient. Projects such as new windows, a heat pump and added insulation will lower utility bills while increasing your home’s overall efficiency. These projects will often pay for themselves when you sell your home. They can also make it easier to qualify for a mortgage and attract a wider range of potential buyers.