Home improvement, also known as home renovation or remodeling, involves changing the interior or exterior of a house. The changes can be made for a variety of reasons, such as improving comfort and style, fixing problems with the house, or adding new living space. It can be done by the homeowner or by a professional contractor. Some projects are small and involve painting or carpeting, while others may be larger and include a complete overhaul of the kitchen or bathrooms. The term can also refer to making the home energy efficient by replacing windows or installing insulation.
Homeowners are repairing and upgrading their homes in record numbers. More than 77 million homeowners have taken on some form of house repair or improvement project in the past two years, according to NerdWallet’s latest Improving America’s Housing report, which uses data from the U.S. Census Bureau and the Harvard Joint Center for Housing Studies. The good news is that more than three-fourths of these homeowners say they’re able to pay for the majority of their projects without tapping into savings or going into debt.
This is great news for Americans. It means the typical household is surviving the recession better than expected and homeowners are more confident in their ability to finance projects than they were in the past.
However, while many homeowners are spending a lot of money on upgrades, they’re not all getting their money’s worth when it comes to resale value. The best return on investment is likely to come from kitchen or bathroom remodels, followed by a basement finishing project. The worst returns are for high-end materials and exotic fixtures, such as a marble countertops or a gold bathtub.
While it’s perfectly fine to invest in upgrades that you enjoy, remember that if you want to sell the home, you’ll need to appeal to as many buyers as possible. The best way to do that is to keep renovations tasteful and neutral.
Another important consideration when doing home improvements is to update your homeowners insurance. Not only will a policy upgrade make your house look more valuable, it can also ensure you have adequate coverage in the event of a disaster or accident.
Lastly, remember to communicate with your contractors about safety concerns during the pandemic. More than half of all respondents to our September NerdWallet survey said they wouldn’t let home improvement professionals into their home for safety concerns during the pandemic, compared with 31% in August.
Homeowners are working harder than ever to improve their homes and it’s great to see them taking control of their finances and staying within budget. But it’s still critical to have a clear idea of how much a project will cost and to consider the long-term return on investment before beginning any work. A little research and careful planning can help you avoid costly mistakes that could reduce the resale value of your home in the future.