There are three certainties in life: death, taxes and if you’re a homeowner, home repair and improvement projects. Whether those are the result of an unavoidable plumbing leak or simply upgrading your kitchen to make it more functional, the costs can add up quickly. It’s important to budget carefully and not go into debt to make home improvements, but even so, many projects end up costing more than expected.
Home improvement, when done well, can increase your property value and make your home more enjoyable to live in. However, it’s essential to talk to a real estate professional before making any high-end improvements to be sure they will pay off when you’re ready to sell.
In the United States, home improvement is a major industry and has been since the 1970s when Bob Vila’s This Old House debuted on TV, creating a new culture of DIY home renovations. The show followed the step-by-step process of a Victorian era house renovation and created interest in historicizing suburban homes. Manufacturers and retailers responded by marketing inexpensive imitation molding, columns and other Victorian-style decorative elements to homeowners eager to transform their homes into a unique historicist style.
The home improvement sector has also been propelled by the popularity of television shows and websites that offer expert tips on how to accomplish a wide range of projects. It’s easy to get inspired and start a project without any prior experience, but it’s important to be aware of the potential pitfalls and how to avoid them.
According to the American Housing Survey, homeowners spend an average of $5,400 per year on home improvement. The most popular categories of work are deck construction, hiring landscapers and fence construction. The survey asks owners to self-report which projects they’ve completed over the past two years, but the term “home improvement” is not clearly defined and may include things like replacing windows and adding insulation.
Cash from savings covers the majority of home improvement projects, but more expensive renovations are often funded with credit cards, personal loans, home equity lines of credit or contractor arranged financing. The survey indicates that the coronavirus pandemic has changed how homeowners interact with contractors, with more than half of those surveyed saying they’d be more cautious than usual when allowing professionals into their homes.
The Home Improvement Law requires that contracts for home improvement projects be in writing and signed before any work begins. The contract should contain a timeline, payment schedule and as much detail about the project as possible, including specific materials being used. In addition, contractors cannot accept more than 1/3 of the contract price as a deposit. Consumers are also advised to perform due diligence on any companies offering to provide services for a fee, such as verification of license and insurance and checking business references. Also, consumers are encouraged to use aggregators that bundle home improvement offers and act as an intermediary between service providers and homeowners.