Home improvement is the renovation, alteration, repair, and replacement of parts of residential or non-commercial buildings and their interiors. Home improvements also include work to outdoor structures such as fences and porches, and the construction of new ones. Other forms of home improvement are the installation, replacement or improvement of insulation; heating and air conditioning equipment; and the modification or alteration of an existing electrical system.
The value of a home improvement project depends on how much it increases the property’s market value and its resale or rental potential. The return on investment (ROI) of home improvements varies greatly, from over 100% to just 20% or less, depending on the type and amount of work performed. Those looking to improve their homes are often advised to choose projects that increase the home’s value and appeal, such as kitchen or bathroom remodeling, basement finishing, adding an addition, or replacing windows.
One of the best ways to determine whether a particular project is a good choice is to look at how it compares to similar projects in the local area. This is especially important for homeowners considering selling their property in the future, as it can help them gauge the likelihood of recouping their costs and turning a profit on the project.
According to the National Association of Realtors, homeowner improvement spending peaked in 2022 and is expected to begin declining in 2024 due to stalled housing sales and mortgage refinancing, as well as rising labor and supply chain costs. Despite this slowdown, a lot of homeowners are still upgrading their houses to make them more comfortable and up-to-date.
In addition to increasing a house’s resale value, many home improvement projects can also save money on utility bills. For example, replacing old, drafty windows with new vinyl ones can lower a house’s energy bills by up to 30%.
However, it’s essential for homeowners to keep in mind that the purpose of a home improvement project isn’t just to add value to a property, but to enhance its comfort and functionality. This means that when planning a remodel, homeowners should consider their own personal needs and desires first and the property’s resale value second.
It’s also a good idea to talk to a home insurance expert before making any major home upgrades. Not only can this help ensure the project is done correctly and that it’s done on a budget, but it can also help homeowners update their home insurance policy to reflect the increased value of the house.
As more and more Americans renovate their homes, it’s important to remember that not all home improvements are created equal. In fact, some projects can actually decrease a property’s value, so it’s vital for homeowners to plan wisely and avoid costly mistakes. To learn more about what home improvements are worth the investment, check out this handy guide from the experts at Hippo Home Insurance. This guide covers everything from the most popular home renovations to which improvements can make your house a real money pit.