Home improvement is a broad term that encompasses many different types of renovations, upgrades and repairs. It’s a good idea to do your research when it comes to home improvements, so you know what to expect and whether or not a certain project will add value to your property.
The Right Contractor
Choosing the right contractor for your home improvement project is an important step in getting the job done properly and within your budget. Don’t rely on price alone to make your decision; contractors vary in experience, reputation and length of time in business. Often, you’ll receive bids from several contractors that are similar in terms of cost and scope of work. Be sure to compare them carefully and don’t be afraid to ask for a quote from more than one.
Insurance & Licenses
When hiring a contractor, it’s important to check with your local licensing agency and insurance company to make sure you’re not getting ripped off. Some contractors don’t carry the necessary insurance, which could lead to expensive repairs down the road if your home is damaged in a fire. Also, it’s best to choose a licensed contractor because he/she will be responsible for ensuring that your home is repaired safely and to code.
Taxes & Money
When you renovate or repair your home, it’s important to keep in mind that you’ll need to pay taxes on the improvement. This includes both the cost of the improvement and the cost of repairs that aren’t included in the home improvement.
The type of improvements you make to your home will have a direct impact on the overall tax impact of your renovations. For example, adding insulation or installing new windows will reduce your energy bills, which can help you save money on your taxes over time.
Investing in a home equity loan is another option for financing a large-scale renovation. These loans are generally repaid over five to 30 years, allowing you to borrow against the equity in your home to cover costs. However, a home equity loan is typically tied to an interest rate that’s higher than traditional credit cards.
A 0% interest-rate credit card is another option for minimal upgrades that you can afford to pay off over a few months. Some cards even offer cashback rewards on purchases like home improvements.
In addition, home improvement projects can qualify for tax credits if they’re considered capital improvements. These credits are worth up to $2,000 each year, depending on the age of your home and the type of improvement.
Some of these credits may also be available if you plan to sell your home. If you’re planning on a major home improvement, be sure to get a certificate of capital improvement from your contractor before you pay taxes on the improvement.
Changing the finish of your home can be a great way to boost its resale value. Adding crown molding, updating the paint colors and choosing new hardware for cabinets can all give a home a fresh look.