How to Afford Home Improvement
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Home improvement may be a great way to improve your living space, but it’s important to weigh your options carefully before making any major changes. There’s a difference between upgrades that produce good ROI values and those that can negatively impact your resale value, or even make it impossible to sell your house in the future.
The home improvement industry is one of the fastest-growing sectors in the economy, with revenues projected to reach $485 billion by 2023, according to JCHS. This industry includes the sale of building materials, appliances and other home furnishings, as well as the contractors, tradespeople and other workers who carry out renovation projects.
But the benefits of home improvement are not limited to cost recovery and increased resale value; there is also a measurable increase in homeowner happiness after completing a project. A study published in the Journal of Consumer Research found that homeowners who undertake a renovation experience increased levels of joy, which is difficult to put a price on.
It’s important to find a balance between these different considerations before starting any project, and there are some easy ways to help keep your home improvements within budget. One of the most common is to use a home improvement loan, which can be used to pay for both minor and major upgrades. These loans are available through a variety of banks and lenders, including online lenders, and can be paid off over a fixed period of time.
Another option is to use your savings account to fund home repairs and improvements. In fact, our September survey found that about three-fourths of respondents report being able to “easily afford” the majority of their home repairs/improvements without tapping into savings or going into debt. However, many people still struggle to save enough money to cover unexpected costs, and the cost of certain home improvements can be much higher than expected.
While you can always use your credit card for the most expensive improvements, a secured home improvement loan is a better choice. It’s easier to qualify for, and typically has lower interest rates than unsecured loans. These loans can be arranged by a bank, such as a home equity line of credit (HELOC) or second mortgage, or through contractor-arranged financing.
Finally, it’s a good idea to talk to a real estate agent before starting any projects. They can help you identify specific projects that will increase your resale value, and give you ideas of what buyers are looking for in your area.
When it comes to home improvements, you want to maximize your return on investment while avoiding unnecessary expenses. By carefully evaluating your project goals, talking to experts and planning ahead, you can make smart choices that will not only enhance your home’s value but also boost your happiness in the long run.