So you’ve decided to tackle some home improvement projects. Whether you’re thinking of selling your home or simply making some cosmetic updates for your own enjoyment, keep in mind that some home improvement projects offer more bang for your buck than others. While you may crave high-end cabinetry and granite countertops in your kitchen, if your home has a leaky roof or drafty old windows, you’ll want to take care of those projects first. Below are some examples of home improvement projects that are worth the money.
What: Repairing a leaky roof
Why: To spare your home from water or mold damage that can be costly to remedy.
What: Installing energy-efficient attic and wall insulation, windows and appliances
Why: To lower utility bills and possibly qualify for a tax credit. If you’re planning on selling, new windows and appliances also brighten a home and add to its desirability.
What: Adding or remodeling a bathroom
Why: To increase your home’s value if you have only one bathroom, as well as remedy faulty plumbing or mold issues. Simple fixes like installing a new toilet and hardware, painting a vanity and re-grouting tile around a tub can make your bathroom look fresh without draining your wallet.
Budgeting and Borrowing
By making a list of your must-haves and nice-to-haves, you can prioritize if some of the renovations are out of your budget. Once you’ve figured out what projects you want to tackle first, it’s time to think about how you’re going to pay for them. Follow these tips to keep your spending in check:
Gather several cost estimates for each job or item to compare prices. Always add an extra 20 percent or more for unexpected expenses. Don’t forget to ask about discounts for grouping multiple projects together.
Consider doing easier jobs, such as painting or re-grouting tile, yourself. Don’t forget to budget for the supplies you’ll need.
Only hire licensed and bonded contractors to perform work on your home. This protects you as a homeowner if anything goes wrong.
Establishing a home improvement savings plan is a great way to begin to finance your projects. Determine how much you want to save, create a timeline and open a savings account exclusively for home improvements. If you’re looking to realize your home improvement dreams sooner rather than later, then Fixed-Rate Equity Loans (FELs) and Home Equity Lines of Credit (HELOCs) are both excellent options that can make any project possible. Both FELs and HELOCs are secured debt in which you use your home as collateral for a loan.
Before you embark on any home improvement project, be sure you have enough of a savings cushion to handle any unexpected expenses that may come your way. After all, you’re making an investment in your home to improve it and create a more comfortable living situation for years to come. Learn more about how to budget and save so that you can have the home of your dreams while also remaining financially comfortable.