Home improvement is a popular activity among homeowners. Whether it’s upgrading the kitchen, repairing a roof, or remodeling an entire home, there are a number of things to consider. Using a home equity loan to finance a large renovation is one way to do it. If you don’t have a large amount of equity to work with, you may have to pay out of pocket. However, home improvements are often tax deductible.
The latest survey by Axiom, a Minneapolis marketing firm, shows that homeowners are making plans for their next home improvement project. Most of the respondents plan to do some work themselves, while others want to hire a professional to handle the job. When it comes to what’s in it for them, they’re most likely to focus on improving the outdoor areas of their homes.
According to the survey, home improvement spending is expected to climb in 2021. In fact, the average home improvement spend is the highest in seven years, according to Mischa Fisher, chief economist for Angi. That’s good news for homeowners. They’ll be able to recoup 74 cents for every dollar they spend on a home improvement project.
Having said that, home remodeling retailers have taken a beating this year. In addition to a general decrease in sales, many retailers have reported an increase in competition. Private label companies have entered the market, which puts more pressure on pricing and differentiation.
It’s no secret that a home’s value increases with a renovation. Oftentimes, home owners will also make improvements for safety or personal preference. This could include installing a new front door, installing a security system, or building a deck. You can even add landscaping to give your home a touch of color.
For the most part, the key to a successful home improvement is to choose projects that will have the most impact on your quality of life. For instance, if you’re planning to upgrade your bathroom, you’ll need to decide whether marble floors are a must. But, potential buyers won’t be swayed by a home with a new $10,000 kitchen range. Instead, invest in upgrades that appeal to a wide audience.
Similarly, if you’re looking to improve your home’s resale value, you need to keep track of how much money you’re spending on labor. Additionally, you’ll want to itemize all of your receipts, as some improvements are only tax deductible in the year that they’re completed.
The Axiom survey also showed that a majority of homeowners will be making a significant home improvement in the next two months. However, a little more than half of those surveyed aren’t planning a major project at all. So what’s a homeowner to do?
The most important thing to remember is that a lot of these projects require financing. One option is to take out a home equity loan, which is essentially a second mortgage. While this option is ideal for home improvements that will last a long time, it’s a good idea to do your research before applying for a home equity loan. There are several types of loans available, including federal loans, home equity loans, and personal loans. These options come with varying interest rates, and they also have their pros and cons.