Home improvement is the process of renovating and upgrading one’s residence. It includes a wide range of projects, from installing new windows and doors to updating kitchens and bathrooms. A popular and effective way to increase a home’s value is by adding an additional bedroom or bathroom. Other popular projects include painting, carpeting and installing wood floors. Some homeowners choose to make more minor renovations, such as repairing leaky faucets and sealing cracks in the basement floor. Others may opt to undertake more extensive remodels, such as installing a new kitchen or replacing the roof. Regardless of the type or size of project, it is important to know how to evaluate the potential return on investment for each home improvement project before committing funds.
In 2022, homeowner improvement spending increased by more than 14% over the previous year and is projected to increase again in 2024. The increase was largely driven by middle-income households, many of whom participated in moderately priced projects. These gains, combined with a decrease in housing sales, led to an upswing in home improvement activity that will likely persist through 2024.
While many homeowners are motivated to improve their homes based on aesthetic considerations, some choose to do so for resale purposes. A primary suite, complete with a private bathroom and walk-in closet, is a good example of a high-end upgrade that can boost a home’s value and appeal. For this reason, it is important for homeowners to think about how their renovations will impact a future sale before they begin work.
Other home improvements that are often made for resale purposes include replacing or adding front doors, landscaping and painting. While these projects can be very worthwhile, it is important to remember that the return on investment will only be realised if they are done well. It is also advisable for homeowners to consult with a real estate professional about any major changes to their property, such as the addition of an extra bathroom or bedroom.
One common mistake that homeowners often make is to overspend on improvements that will not add value to their home. This can happen if homeowners invest in upgrades that are too personal, or not in line with the style of their neighbourhood. For instance, if all the homes in the area have an in-ground pool, adding an above-ground pool might be seen as tacky by potential buyers.
Finally, a common mistake that homeowners often make is to spend too much on materials and end up going into debt to finance their renovations. This is a bad idea for several reasons, including the fact that homeowners are not always able to recoup their initial investment when they sell their home. It is advisable for homeowners to avoid this trap by selecting budget-friendly materials and taking advantage of the various discounts offered by renovation companies. It is also a good idea to look for a company that is member of a professional organisation or accredited by a trade body.