How to Pay for a Home Improvement Project
There are a few certainties in life: death, taxes and if you’re a homeowner, home improvement projects. Whether they come in the form of a leaky roof or an eye-catching new fountain for the backyard, they’re inevitable. But you don’t have to go into debt or sacrifice other areas of your lifestyle to complete them. In fact, it’s better to start small and take on one project at a time. There are many benefits of doing so, from enjoying your home more to increasing resale value.
In the past year, more than half of homeowners who completed a renovation or remodeling project said they were easily able to pay for the majority of it without tapping into savings, going into debt or making other sacrifices. And that’s a big deal considering the fact that a recent survey by Real Estate Witch found 95% of homeowners have a list of “projects they’d love to tackle.”
Generally speaking, anything that adds value or functionality to your property can be considered a home improvement project. This includes things like painting, resurfacing your driveway and sidewalks, installing patio doors or window treatments, landscaping, putting in a pool and much more. It also includes anything that upgrades or maintains your existing systems and structures, such as repairing your roof or replacing your windows.
If you’re unsure about whether something is considered a home improvement, there are some states that will give you a clearer picture by providing specific regulations and laws. In New York, for example, contractors must charge sales tax unless they have documentation that your project meets the state’s definition of a capital improvement. This document can be obtained by completing a NYS form ST-124, Certificate of Capital Improvement.
According to the American Housing Survey, people are most likely to pursue home improvement projects when their homes need major repairs or are outdated. Married couples with children were most likely to pursue a project, while single persons were least. Baby boomers were the biggest spenders in the home improvement industry, consuming nearly half of all spending in the sector in 2017.
How Can I Pay for a Home Improvement Project?
The most popular ways of paying for a home improvement project include cash from savings, credit cards, cash-out refinancing or contractor arranged financing. The survey also notes that 6% of homeowners use other sources of funding for home improvement projects.
In general, homeowners who want to make sure they’re getting the most bang for their buck should consider consulting a local real estate expert. They’ll be able to tell you which projects are most likely to add value and which ones may not be worth the investment. They can also help you make sure you’re not overdoing it and spending more than your home is currently worth. They can also help you decide which projects to prioritize based on your budget and schedule. It’s important to plan ahead, because a poorly executed home improvement project can actually hurt your resale value in the long run.