Home improvement, also known as remodeling or renovation, is the process of changing the interior or exterior of a building to improve it. These changes can include adding rooms, improving energy efficiency, or changing the layout of a room. In some cases, the change may be minor, such as painting a room or replacing flooring; in others, it could be a major reconstruction, such as adding an extension or renovating the entire house.
In general, the value of a home improvement project depends on the return on investment (ROI) and whether it will enhance or increase the home’s utility and desirability. However, there are many factors to consider when choosing a home improvement project, including how much the homeowner is willing to invest and how easy it would be to sell in the future.
The 2021 American Housing Survey found that 78% of home improvements were paid for with cash, while the rest came from other sources. These sources included cutting back on discretionary spending, selling items, tapping or exhausting emergency savings and taking out loans. It is important to have a plan for how to pay for a project before beginning work.
Even in a good economy, not every home improvement project will give you the best return on your money. It’s important to keep your long-term goals in mind and avoid undertaking projects that have a purely personal appeal, like adding that water feature and koi pond out back. Such additions will likely turn off potential buyers, who may be more apt to choose other homes in the area without them.