Home improvement, also known as remodeling, consists of any construction-related activities that upgrade an existing home interior or exterior. Popular home improvement projects include kitchen renovations, bathroom remodels, basement finishes, decks, painting, landscaping and more. These improvements add value and functionality to a property, making it a more comfortable and appealing place to live.
Many homeowners undertake home improvement projects in an attempt to increase their property’s resale value and curb appeal. However, not all projects have the same effect on a home’s value. A few major renovations may actually decrease a property’s resale value or turn off prospective buyers, according to real estate experts.
It’s one thing to watch a rerun of Fixer Upper or This Old House on TV and feel inspired, but it’s another thing entirely to pull out the hammer yourself. Whether you’re thinking of renovating your kitchen, redoing your living room or putting in a new outdoor structure, you should carefully weigh the pros and cons before pulling out the sledgehammer. Read on to learn which home improvements tend to yield the best return and which you should avoid at all costs.
Adding value to your property isn’t as simple as choosing the right home improvement project and hiring professional contractors. A home’s resale value is tied to its location, neighborhood and the value of comparable properties in the area. As a result, you can end up losing more money on your renovation than expected if you choose the wrong projects for your home.
For example, installing an in-house movie theater or custom-designed floors will likely only add a few percentage points to your property’s overall value. In contrast, a sparkling bathroom overhaul or kitchen remodel will almost certainly make your home more marketable.
Homeowners are spending more and more money on home improvement projects, especially as they continue to stay put rather than move up to a larger home due to historically high mortgage rates. But it’s important to focus on renovations that will add value and be repaid in the long run when it comes time to sell your home.
Consider talking with a real estate agent in your area to see what renovations are likely to boost the resale value of your home, says Steckel. Then, if you need to borrow money for a home improvement project, look into a personal loan or loan options that don’t require collateral or use restrictions.
A personal loan may have an introductory 0% APR period and offer cashback rewards, which can help reduce the cost of your home improvement. If you need a longer term, consider a home equity loan or credit line with repayment periods up to 20 years. You can also explore federal home improvement loans and other government-sponsored funding programs that have low rates.
