How to Pay for Home Improvement Projects

The word “home improvement” refers to a wide variety of improvements, both minor and major, that can be made to a house or apartment. The most common home improvement projects are kitchen upgrades, bathroom updates, and yard cleanups. However, other projects can include adding a deck, repairing fences, putting in a new roof, and even painting or re-grouting tile. These and many other do-it-yourself (DIY) projects can add real value to your home, and can also help you list it for more money if you are ever ready to sell.

But, how you pay for these projects is an important consideration. According to the 2021 American Housing Survey, most homeowners surveyed reported paying for home improvement projects using a mix of sources. The most common way was by cash, with 78% of projects being funded this way. Other ways included cutting back on discretionary spending, selling items, tapping into savings, and borrowing or going into debt.

Interestingly, while most planned projects focus on improving their home’s livability, only 20% of those considering projects say they are doing so to make the property more attractive to potential buyers. More than half are doing so to make the property more comfortable for their families, and 33% say they want to feel satisfied with their homes.

The most popular project is a kitchen remodel, with 57% of homeowners planning this upgrade. It is followed by a master suite addition, with 40% planning this project. A new roof and exterior paint are also high on the list of desired upgrades, with 35% of homeowners citing these as their top priority.

If you are considering taking on a DIY home improvement project, you should first determine your budget and decide what your priorities are for the project. Then, you can start researching your options for the type of materials and labor required. It is important to get quotes from different contractors before making a decision. This can help ensure that you are getting the best possible price and that the project is being done correctly.

It is also a good idea to look into energy efficient upgrades. Adding things like new windows, a heat pump, and additional insulation can decrease your energy costs, and will save you money in the long run. This will be an added benefit if you do decide to sell your home, as buyers are looking for homes that will lower their energy bills.

If you are unable to pay for your home improvement project with cash, it may be worth exploring the option of borrowing to fund the work. However, it is important to understand the interest rates and monthly payments before moving forward. It could make more sense to wait on a larger project and see how the economy, inflation, and potential for a recession play out before proceeding. After all, the last thing you want is to take on a large loan and find yourself struggling to pay it off.