Home improvement is booming, with spending on renovations up 50% since the last recession. Rock-bottom interest rates and more homeowners staying put, deterred from trading up or down, are fueling the surge in improvements. Almost all categories of work are surging, but the ones showing the most growth have to do with things outside the house: Deck construction is up 275% and hiring landscapers to build fences is up 144%. Interior upgrades such as painting and laying new carpet are also on the rise.
Those who are renovating with the intention of selling their homes soon should be careful not to spend more than they can recoup in increased home value. That’s because what buyers want to pay for a property is closely tied to the prices of other houses in the neighborhood. A bathroom with marble flooring, for example, may appeal to a certain type of buyer but probably won’t be in keeping with the price range of the average home on the block. Likewise, an in-house home theater might be cool but could prove off-putting to prospective buyers.
For these reasons, experts recommend homeowners do their homework before beginning a big project. First, they should decide exactly what improvements they’re after and make a thorough list of the work needed to get there. They should then look at the costs of different projects and select a contractor with a good track record, as well as one that fits their budget.
Then, they should consult with a real estate agent to see which upgrades will actually add value to their home. This is particularly important if they’re planning to sell their home within a few years. It’s also a good idea to talk to neighbors and friends about which contractors they’ve worked with on their own homes. They can provide a wealth of useful information, including whether they were pleased with the quality of the work and the contractor’s ability to complete the project on time.
Finally, homeowners should never go into debt for a home remodel. Not only does that reduce their home’s equity, but it also means they’ll have to pay more in interest than the original cost of the project. Moreover, the money borrowed to finance home improvements doesn’t belong to the homeowner; it belongs to the bank.
Still, there are plenty of low-cost and high-value home improvement ideas out there. Some of them involve very little work and only require a little cash, while others are more costly but can have a big impact. With a little research and some elbow grease, homeowners can upgrade their properties without going broke or running up their credit card bills. By following these smart tips, they’ll have a better chance of getting their renovation dollars back when it comes time to sell.