Home improvement is one of the biggest investments you’ll ever make in your lifetime. Whether you plan to sell your home in the future or want to enjoy it for years to come, there’s no shortage of ways to add value. From a fresh coat of paint to adding an additional bedroom, the possibilities are endless. However, it’s important to remember that not all renovations are created equal. Some are likely to increase your home’s resale value while others may detract from it.
Homeowners have a lot of questions about remodeling their homes. They’re curious what the most popular home improvements are, which renovations will increase their house value, and which projects to avoid. The television schedule is packed to the brim with shows about home renovation, but it’s one thing to watch Fixer Upper and another to take up a hammer yourself.
The coronavirus pandemic has had some homeowners taking a closer look at their homes. About 3 in 5 homeowners have done some type of home improvement project since March, according to a NerdWallet survey, and they’ve spent an average of $6,438, per project.
Many homeowners are tempted to do their own home repairs during the pandemic, but hiring professionals is a better choice for some projects. When choosing a professional, compare not only prices but also reviews, experience, and reputation. It’s also smart to make sure your contractor has a license and insurance, as well as a contract that clearly defines the scope of the work.
It’s also essential to consider the impact of any home improvements on your property taxes. In some states, the cost of certain home improvement projects is tax-exempt, while in others it is not. In New York, for example, the material cost of a home improvement is not tax-exempt unless you have documentation that your project meets the state’s definition of a capital improvement. You can get this document by completing a Form ST-124, Certificate of Capital Home Improvement.
Homeowners are still putting a lot of time and money into their homes, with the majority saying they’re doing renovations to improve their quality of life. But it’s important to keep in mind that the return on those investments can vary from over 100 percent to just 20 percent, depending on what you do. This means that not all home improvements will add value to your home or even help you recoup the cost of the project.