Home improvement is a process of renovating or making repairs on the exterior and interior of a home, as well as any attached structures such as garages, sheds and fences. It also includes work on plumbing, heating and air conditioning, electrical work, flooring and other similar jobs. Home improvements can increase the safety and comfort of a home, as well as add to its overall value. Many homeowners undertake renovation projects in hopes that they will recoup some or all of their costs when they sell the house.
However, not all home improvements will increase your home’s resale value. In fact, some may even decrease it. The key to determining what projects will add value to your home is understanding how potential buyers view your property and making improvements that reflect those desires.
According to Merriam-Webster, the term home improvement is defined as “the construction, repair, replacement, remodeling, alteration, rehabilitation, modernization, or improvement of a dwelling house.” This includes anything from installing a new front door to replacing aging roofing materials. A well-planned budget is essential to ensure your project stays on track and does not go over your allocated funding.
Before beginning a home improvement project, you should familiarize yourself with your neighborhood to see what kinds of home improvements other homeowners have made in the past. You can do this by taking a drive through the area, or walking around on foot. You can also get ideas for your own project by observing what others have done to their homes. If you are unsure what types of home improvements will increase your resale value, ask an experienced real estate agent to provide you with some advice.
Some home improvements can be tax deductible, as long as they are completed within a certain time frame. The amount of tax deductible depends on the type of improvement, so it is important to consult with a CPA before starting any projects. For example, if you install a new energy-efficient furnace and water heater, you might be eligible for up to $5,000 in federal tax credits.
Other home improvements may be taxable, but only on the labor cost. In this case, it is best to contact your local department of taxation and finance for more information. Some common examples of tax deductible home improvements include a new roof, new siding, insulation in the attic and a septic system.
Avoid high-end renovations that don’t suit your neighborhood or budget. Purchasing top-of-the-line appliances and marble countertops might impress you, but they will turn off most prospective buyers. Instead, choose more modest upgrades that will appeal to a broad range of buyers.
Don’t forget to update your home insurance when you make any major improvements. Your current policy might not offer adequate coverage, so it’s a good idea to get a new quote after any significant changes. This will ensure that your new renovations are covered in the event of a disaster or fire.