As home values reach record highs, many homeowners are taking on new projects. While the recession put many homeowners off of home improvement projects, this improved economy is giving them the opportunity to complete those plans. In many cases, homeowners were unable to fund such projects during the recession, but now they are finally taking on their long-awaited renovations. With the right resources and contractor, any home improvement project can become a successful endeavor. In this article, we’ll look at the cost, benefits, and possible pitfalls of taking on new projects.
Cost
Home improvement projects can add value to your home, but the initial cost can be prohibitive. You may need to replace a roof or add a bathroom, or you might be considering an in-ground swimming pool to attract prospective buyers. Whatever the purpose, home improvements can add a significant amount of money, and they vary greatly in price. According to the National Association of Home Builders, the average cost of a new roof is $4,707, while a new swimming pool can cost $28,000 to $55,000 depending on the type of renovation.
Return on investment
When making an investment in your home, you can take a variety of factors into account. While curb appeal is one factor in home value, upgrades like adding functionality and square footage also add value. A good rule of thumb is to aim for at least 70 percent of the original investment. The downside of investing in such projects is that they may not have a good ROI in the future. Furthermore, not every project will be attractive to all buyers, which means that you may need to reconsider your investment.
Contractors
Consumers should thoroughly investigate contractors before hiring them to do any home improvement work. Contractors should have appropriate insurance, including personal liability, workers compensation, and property damage insurance. Check with state licensing agencies for information. If they are not, you can ask for copies of their licenses. Check with state licensing agencies to determine if they have complaints or government disciplinary actions against their company. Consumers should also check with county district courts to determine whether a contractor has ever been sued or has filed bankruptcy.
Credit cards
When considering credit cards for home improvement, it’s important to compare the various terms and fees. While you may not be interested in paying the highest interest rate, the longer the introductory period, the lower the regular interest rate will be. The introductory period is generally longer, so you may want to choose the card with the longest introductory term if you’re planning to use the funds for a large project. If you plan to use the funds for other purposes, it’s important to check the terms of each card and decide which one is the best choice for you.
Loan options
There are several loan options available for your home improvement project. One of the best options is a home equity line of credit (HELOC). This type of loan allows you to borrow against the equity in your home, and can range anywhere from 70 to ninety percent of the value. Some lenders even allow you to withdraw all of the equity in your home if you are unable to pay back the loan. However, it is important to know that the terms and conditions of the loan vary.