Home Improvement and Resale Value

Home improvement

Home improvement, or renovation, is an investment that enhances the value of a home and can improve the lives of its occupants. It can also boost local economies by increasing the market for construction materials and products, and it can raise neighborhood standards and increase property values. However, it is important to consider the return on your investment before putting in the hammer. Some home improvements are better suited to increasing resale value than others.

According to a recent survey by NerdWallet, homeowners who renovated during the pandemic enjoyed greater satisfaction with their homes than those that did not. Respondents cited satisfaction with worn-out surfaces and finishes, adding features and improving livability, and the desire to make a change as their motivations for upgrading.

The most popular home improvement project is re-painting. This is often an inexpensive way to transform a room and freshen up the look of a house. Other projects include changing light switches to new fixtures and installing energy-efficient appliances. Homeowners are able to save money on home improvements through tax credits, rebates and discounts.

While many DIYers are able to carry out some projects on their own, it is a good idea to have professional contractors for projects that involve electrical wiring, plumbing and cutting through walls. It is always a good idea to have a written contract and get multiple quotes before hiring anyone for any type of work at your home.

It is important to remember that contractors may vary in price, quality of work, reliability and ability to complete a job on time. It is recommended that consumers compare the price of various contractors, as well as their business reputation, experience and licensing. Consumers can check a contractor’s license by visiting www.mdhic.org and by contacting the Maryland Department of Labor, Licensing & Regulation’s consumer hotline at 800-654-7030.

Most projects are paid for with cash from savings, but the most expensive improvements are typically paid for using a combination of sources. These include cash from savings, credit cards, loans from family and friends, and other sources, such as a home equity loan or contractor-arranged financing.

The most expensive upgrades tend to be those that add square footage or luxury items, such as marble countertops or high-end flooring. The key to resale value is to choose upgrades that appeal to the largest number of buyers. For example, converting a garage into living space will not appeal to most buyers and may only attract a narrow segment of the population. It is also a good idea to avoid oversized upgrades, such as a huge kitchen expansion that is out of proportion with the rest of the house. It can be a deterrent for potential buyers and may not recoup the cost of the addition. A good rule of thumb is to spend no more than 5% of your home’s total worth on upgrades. This will keep you from getting into debt or spending more than you can afford to recoup when you sell your home.

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