Budgeting For Home Improvement
Whether it’s painting the house, remodeling a kitchen or installing new appliances, home improvement can make your home look better. But it can also be expensive, so homeowners should budget for the project carefully to avoid running into debt or exhausting savings.
Aesthetically pleasing upgrades can help you sell your home faster, and add value to your property if you decide to stay. But they don’t always have to cost a fortune.
The home improvement industry is a big chunk of the American economy, and it’s growing more than ever. In fact, it’s stronger now than in years past, thanks to an influx of older homeowners who want to make their homes more attractive and functional.
Home improvements are an essential part of a successful real estate strategy, helping to boost your home’s market value and reduce your mortgage payments in the long run. The average homeowner spends about a half-trillion dollars on home improvement projects each year.
Despite that, fewer than half of homeowners who took on home improvement projects over the past two years say they were able to pay for the majority of them without tapping into savings, making sacrifices or going into debt, according to NerdWallet’s latest survey.
If you’re looking to get a contractor to do work for you, it’s important to know how to select one that will be able to do the job properly and on time. Check out contractors’ credentials, including their licenses, insurance and references.
Be sure to choose a company that has been in business for at least two years and is licensed in your area. Some states require contractors to pass a test on home improvement law and general business competency before they can get licensed.
In addition to checking a contractor’s license and experience, homeowners should always look for contractors who have a reputation for quality work and are willing to work within your budget. It’s also worth comparing prices from different companies before you hire the first one you receive.
Many home improvement contractors offer financing options for minimal upgrades that you can’t afford to pay in full. However, be wary of borrowers who try to charge you interest or fees for early payment of the loan or who charge you a high annual percentage rate (APR).
Building equity through simple home improvements can be an effective way to raise your home’s value, but it does require a bit of planning. Start with a budget, and focus on small, relatively inexpensive changes that will have the biggest impact on your home’s overall value.
It’s also a good idea to check your state’s tax laws, as many home improvements are not deductible. But if you can show they were performed for a business, then you may be able to write them off on your taxes.
