Home improvement is a huge industry, with consumers spending money to renovate their homes and buy new furnishings. This sector has experienced impressive growth in recent years, particularly during the COVID-19 pandemic. It includes the sale of building materials, appliances, decor, and services provided by contractors and other workers who help homeowners with their home improvement projects.
Frequently, people take on home improvement projects with an ulterior motive—they hope that their work will boost their property’s value as well. Who wouldn’t want a new kitchen, state-of-the-art bathroom, or finished basement? Sadly, the answer to that question is “not everyone.” In fact, some home improvements actually decrease property value.
One common mistake homeowners make when they remodel their homes is over-improving them, going too far beyond what the market can bear. That’s what leads to soaring renovation costs, which can drive potential buyers away and put the homeowner in debt. A better option is to choose midrange upgrades that will add visual impact without costing a fortune.
Another way to avoid costly mistakes is by paying cash for renovations, instead of taking out a loan. Getting a mortgage can often come with 0% interest, but if you use that credit to purchase expensive renovations, you’ll still end up paying thousands of dollars in interest over the life of your loan. Paying in cash will allow you to get the upgrades you’ve always wanted, and save you the hassle of repayment in a few years’ time.