Home improvement is an activity that improves the interior and/or exterior of a home, including its structure, fixtures, and finishes. Such improvements can increase a home’s value and/or make it more functional. It can also decrease a home’s energy costs. Home improvement is generally done by contractors, but can also be done by homeowners themselves. Some common home improvements include replacing windows and doors, painting, refinishing floors, installing cabinetry, adding insulation, and building an addition.
Homeowners are increasingly choosing to renovate their homes rather than selling and moving on, according to a new report by Houzz. In fact, more than one third of the home improvement projects planned by homeowners this year involve remodeling a kitchen or bathroom. This is due to historically high mortgage rates, which are making it harder for people to afford a new home.
However, there are some common mistakes that can be made when completing home improvement projects. For example, if you spend a lot of money on a unique light fixture that you absolutely love, but that potential buyers would find jarring or distracting, it could detract from the overall value of your home. Another mistake is going into debt to finance your renovations. This is not only a bad idea for your personal financial health, but it can also make your home less appealing to potential buyers when you decide to sell.
Before you pick up a hammer or tear up your carpet, be sure to read our Home improvement articles. We’ll help you determine which renovations are worth the investment, which ones to avoid, and how much a project is likely to cost. We’ll also give you some DIY tips for upgrades that can add significant value to your home without breaking the bank.
Is Your Contractor Licensed?
A licensed home improvement contractor is required by law to have insurance and a current Home Improvement Permit. You can find a contractor’s license number by searching online or calling your local government agency. You should never hire a contractor who does not have a license. If a worker is injured on your property or damage is caused by unlicensed work, you could be held liable.
Is The Work Tax-Exempt?
Whether or not your project is subject to sales tax depends on state regulations and the definition of “home improvement.” For instance, in New York, contractors are required to collect sales tax on labor and installation services unless you have documentation that the project meets the state’s definition of a capital improvement. You can obtain this documentation by completing Form ST-124, Certificate of Capital Home Improvement.
The most important thing to remember when completing a home improvement project is to focus on your family’s comfort and needs first, and the resale value of your house second. While a large return on investment is certainly possible, it’s best to have realistic expectations. After all, real estate history shows that not every renovation pays off equally.