Home improvement is a common activity among homeowners, and one that often requires a lot of time, effort, and money. A few simple improvements can make a big difference in the look and feel of your home. But it’s important to know the facts before you start a project.
Home renovations are a huge part of the home improvement industry, which encompasses everything from the sale of building materials to contractors and tradespeople that help with installation or repairs. These projects can range from simple to complex, and they can be done by people of all skill levels. They can also be done with the help of a professional or expert, and may include plumbing, roofing, electrical, and more.
In the past two years, the nation’s largest home improvement retailers saw a boom in remodeling and DIY projects. Homeowners poured money into their homes to upgrade and repair them during the pandemic. Now, that’s slowing down—but not stopping altogether. Households are putting the brakes on some ambitious projects and shifting their focus to smaller, cheaper do-it-yourself fixes.
The most popular home improvements involve refreshing shower areas, laying new tile, replacing vanities and toilets, repairing damaged or outdated flooring, and sprucing up kitchens with fresh paint and new appliances. But the biggest renovations—like adding a new bedroom, bathroom, or kitchen—can be costly. In our 2021 survey, about 20% of those who did major renovations reported that they had to cut back on other spending or sell other items to afford them. Others had to drain or tap into their emergency savings, and 12% had to take out a loan or credit card to pay for the work.
A few tips to keep in mind when undertaking a home improvement project:
Don’t go into debt. It’s not only expensive, but it can be stressful to have a large debt hanging over you. Instead, save up the cash to fund your project, or talk to a real estate agent about the resale value of your home before investing in a high-end upgrade.
If you must borrow, choose a secured home renovation loan, such as a home equity line of credit or second mortgage. These loans use your home’s equity as collateral and come with a lower interest rate than unsecured loans. Having a plan for your project is critical. This will help you stay on budget and avoid a major hiccup down the road, such as discovering that your plumbing leak resulted in a rotting subfloor or your shingles were hiding shoddy repair work. It’s also a good idea to discuss your plans with your local building code department and/or home insurance agent before you get started. These experts can provide valuable advice about zoning requirements, safety concerns, and permit processes.