A home improvement is an alteration, modification, addition or repair to a single family residence or multifamily structure such as a townhouse, condominium or apartment building. Home improvements may also include outdoor projects like a deck, shed or retaining wall. Inside the house, a home improvement can be anything from a new paint job to a kitchen remodel. Homeowners often undertake home improvements to increase the value of their property or to make it more livable for themselves and their families.
Home improvements are not always a good investment, however. Some upgrades only pay off if you resell the property, and even those that do bring in money may not fully cover costs. There are some home improvement projects, such as a new roof or energy efficient windows, that can be costly but have a high return on investment because they save on utility bills.
Other renovations, such as a bathroom or kitchen remodeling, are not as likely to increase the value of your property, but they can significantly improve your quality of life while you live in the home. Creating a dedicated space for entertaining can add to the enjoyment you get out of your house and give guests a place to escape when things start to heat up.
Television home improvement shows and a cultural trend toward DIY have made it easier than ever for people to do their own projects. Carpentry and other projects that were once a male-dominated endeavor became less intimidating for women with the popularity of shows like Bob Vila’s This Old House and Trading Spaces. Many projects can be done for a relatively low cost and don’t require any special skills, such as re-grouting tile or replacing worn doorknobs.
While the heightened interest in home improvement has fueled spending, it hasn’t necessarily increased property values. In fact, the JCHS predicts that home improvement spending will hit its peak in 2022 and then begin to decline. The reason is a combination of factors, including rising labor and materials costs.
Despite economic challenges, most homeowners are planning on making home improvements this year. The most common reasons given by surveyed homeowners for their planned projects are improving a home’s comfort (54%) and adding features or upgrading livability (20%). Less commonly cited reasons include increasing the home’s attractiveness to potential buyers (18%) and addressing health, safety or security issues (14%).
If you’re thinking about undertaking a home improvement project, consider why you want to do it in the first place. If it’s to sell the property at a profit, you should discuss your plans with a real estate agent and make sure any changes won’t detract from your home’s overall marketability. Otherwise, it may be better to wait until the economy improves and financing is more affordable. Be sure to factor in the monthly payment if you plan on using a credit card or home equity loan, and try to stick within your budget. If you don’t, the interest and debt could end up taking more from your overall net worth than the project itself.