Home improvement is an industry that includes companies involved in the renovation or upgrade of homes. It encompasses a broad spectrum of activities, including the purchase of building materials, appliances, and decor, as well as the hiring of contractors and tradespeople to perform home improvements. The Home improvement industry has experienced strong growth in recent years. Homeowners who renovate their properties usually do so for one of the following reasons:
A growing interest in DIY (do-it-yourself) projects
The rise of the Internet has made it easier than ever for homeowners to complete projects they might have once hired professionals to do. This has fueled the popularity of DIY home improvement, which is often considered less expensive than hiring professional contractors.
In addition, rock-bottom interest rates make home improvement more affordable than it would have been in the past. Anderson says that the categories seeing the largest increases are outside work, such as landscaping and putting up fences.
Nevertheless, it is important for homeowners to be cautious when hiring someone to do any kind of home improvement work. Consumers are advised to only hire licensed, reputable contractors and to obtain a written contract. The contract should include a detailed description of the work to be performed, a timeline for completion, and a payment schedule. It should also include any warranties on materials and workmanship, and specify any other matters upon which the parties lawfully agree.
Some home improvements are necessary for safety or security reasons, such as fixing an electrical problem or repairing a leaky roof. These kinds of projects are usually a matter of urgency and must be completed before further damage can occur.
Another reason for homeowners to undertake home improvements is to increase their property value. This is especially true if they are thinking about selling their home in the future. Some of the best return-on-investment home improvements are kitchen and bathroom remodels, adding a deck, and replacing windows.
According to the National Association of Realtors (NAR), despite the COVID-19 pandemic, many homeowners have continued with home renovations. In fact, the NAR reported that 83% of surveyed homeowners who had recently renovated their homes had done so because they wanted to enjoy their homes more, rather than out of necessity.
The most common sources of funds for home improvements are credit cards, loans from banks and other financial institutions, or the cash saved from previous renovations. However, the NAR advises that homeowners should never draw from their emergency fund to finance a home improvement project. It is a good idea to consult with a financial planner before starting any major home improvement projects. They can help you establish a budget, choose the right contractors, and avoid costly mistakes. They can also help you create a plan to pay off any debt or finance the renovations with a HELOC (home equity line of credit). A HELOC is a revolving loan that draws on the homeowner’s equity in their home.