Home improvement is a term that encompasses any kind of home renovation, repair or upgrade. This can include everything from minor projects that involve a DIY attitude to major renovations that require professional contractors.
Homeowners often undertake remodeling projects with an ulterior motive – they hope the new features will increase the value of their property, either for themselves or when they sell. Whether it’s a master suite, a finished basement or a swimming pool, homeowners are always thinking of ways to boost their home’s value while also adding enjoyment and functionality.
Generally, however, not all home improvements are created equal and some can actually detract from your home’s value. So before you start your next project, it’s a good idea to do some research and make sure that the changes you’re planning will help improve the overall value of your home.
If you’re considering a renovation that will boost your home’s value, think long term and remember that the market is constantly changing. You’ll need to take into account the price of comparable homes in your neighborhood and other factors that can influence the market value of a home in your area.
Not all home improvements are aimed at increasing the value of your home; instead, many are designed to make your living space more comfortable or satisfy personal needs and tastes. But not all renovations are worth the cost, especially if you’re looking to sell your home in the near future.
The best way to decide which improvements will add the most value is to consider how much you will recoup when it comes time to sell your home, says Robert Steckel, vice president and associate director of real estate analytics at Zillow. That’s called the return on investment, or ROI.
In most cases, an ROI over 100% is considered a great return, and it means that the investment you make will pay off for you in the long run. But the most important thing to keep in mind is that your ROI depends on your location, the type of home improvement you’re doing and the current state of the housing market.
Another factor to consider is the tax impact of your renovation. Certain energy-saving home improvements, for example, can give you tax credits at the time of purchase that could offset some of your costs, so it’s important to consider those when determining which renovations will be most valuable for your home.
If you’re going to hire a contractor for a project, it’s also a good idea to ask them if they have the proper license in your state. If not, you may need to pay sales tax on the labor cost that they bill you.
It’s also a good idea to ask if they have any past work that they can show you. That can give you an idea of the level of experience that they have in the field. Plus, you can get a feel for their quality of work and the materials they use.