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A Guide to Selecting the Right Home Improvement Project
Improving your home may increase its value and your satisfaction with the space.
When it comes to sprucing up your living space, choosing the right home improvement project may be a challenge. It’s common to feel unsure about which project to pursue, especially if you’re trying to get the most bang for your buck. It’s like finding the perfect home for your family all over again!
Many people may worry about choosing the right project or allocating too much money to the wrong project. To combat these concerns, we’ll walk you through a simple process to help you choose the right option for your space.
We’ll also dig into some of the most common home improvement projects, how likely they are to give your home’s value a boost, as well as different methods you might use to pay for them.
Key Takeaways
Not all home improvement projects are created equal, in cost or return on investment.
There are several ways to pay for home improvement projects, from using savings to taking out a loan.
When choosing a project, consider your goals, budget, and potential payoff before diving in.
How to Choose the Right Home Improvement Project
When it comes to choosing the right home improvement project, there are several factors to consider. It’s not just about what looks great or following the latest trends, it’s about matching the project to your vision for the space.
Step 1: Set a Goal
Yes, we know this seems like a bit of a “no kidding” step, but taking some time to firmly establish what you’re trying to accomplish could save you a headache down the line.
Understanding why you’re upgrading your home and what you want the changes to accomplish could help you choose the right project.
For example, if you are trying to increase your house’s value before selling it, you may want to focus on renovations that offer the highest return on investment (ROI), such as making your space more functional, adding curb appeal, or increasing energy efficiency.
Some examples of these projects may include kitchen renovations, bathroom upgrades, landscaping, or adding solar panels.
On the other hand, you may be more interested in turning this space into your dream home and want to prioritize projects that maximize your comfort or make room for a growing family. Projects in this category may include transforming a spare room into a home office or gym, adding a wood-burning fireplace to the den, or adding a new garden.
Keep in mind that these transformations may also add value to your home, but they may just recoup less than others. We’ll talk about ROI more in a moment.
Step 2: Research the Cost
Again, we know this seems silly, but small costs along the way have a habit of becoming a lot in the end. We’ve all been in this scenario, right?
Picture it: you’re in the middle of a project and you find yourself saying “If I just spend a little more money, I’ll get it done,” only to reach the finish line and realize you actually spent a LOT more to get things finished?
Before you start buying supplies and hiring contractors, take some time to find out how much your project is likely to cost. Then, add a margin for overages, because they always happen.
Once you have this number, ask yourself if you are still able to afford the project.
The following chart offers a glance at common home improvement projects, their average costs, and the amount they typically recoup for homeowners, according to Zillow.1
Type of Improvement | Cost | Resale | Recoup |
|---|---|---|---|
Bathroom Remodel2 | $19,134 | $13,422 | 70.1% |
Kitchen Remodel | $28,279 | $20,125 | 71.2% |
Roof Replacement (Asphalt shingles)3 | $22,636 | $15,247 | 68.2% |
Siding Replacement (Vinyl) | $18,662 | $12,541 | 67.2% |
Window Replacement (Vinyl) – 10 windows4 | $20,482 | $13,822 | 67.5% |
Deck Addition (Composite) | $24,677 | $15,315 | 62.1% |
Garage Door Replacement | $4,041 | $3,769 | 93.3% |
These numbers are likely to vary depending on where you live, so be sure to contact professionals in your area to get the most accurate quotes.
Step 3: Decide on Your Timeline
The start date of a renovation project also plays a big role in your renovation planning.
Some projects, such as putting in a pool, may only be viable during certain months of the year if you live in a colder climate. Other projects may cost more depending on the time of year because of demand—everyone wants to build a deck in the spring!
It’s also important to think about how long the project could take and how that timeline may impact your life. For example, if you’re going to completely renovate the only bathroom in your home, you may need to factor in ancillary costs like a few nights at a hotel.
Step 4: Choose a Financing Method
OK! You’ve figured out why you’re pursuing this project, how much it’s going to cost, and when you want to do it. Now you just have to pay for it.
Deep breath – we’ve got you covered. There are several ways to fund home improvement projects. Here are some of the most popular:
Using Your Savings: If you’ve been planning on this renovation for a while, you may have set money aside in a savings account to handle the costs. Using your savings may help you pay less money for the project in the long run by avoiding potential interest charges or fees.
Taking Out a Personal Loan: Personal loans may be a convenient financing option for improvement projects, especially if you don’t have enough savings on hand or don’t have equity in your home. Using a personal loan for home improvement allows you to borrow a lump sum with a fixed rate and a set repayment period.
Charging a Card: Depending on the project’s cost and timeline, a credit card may offer you the opportunity to quickly purchase materials for the project. Be sure to keep in mind your ability to pay off the card and how much interest could accrue on your purchases, given that credit card rates tend to be much higher than other lending options.
Tapping Into Equity: If you’ve built up equity in your home, you may be able to utilize a home equity loan or home equity line of credit to finance home improvements. These loans allow you to borrow against your home’s value and may offer a lower rate compared to a personal loan since you secure your loan with your house as collateral. However, a home equity loan application often takes longer to complete than a personal loan and an appraisal may be required.
When it comes to financing these projects, consider the repayment terms, fees, and monthly payment amounts.
It may also be useful to discuss potential projects with a real estate expert to determine which one could add the most value to your home.
Final Thoughts
Choosing the right home improvement project requires you to evaluate your overall goals, budget, and potential return on investment. Since not all updates are created equal, prioritize those that are likely to add value to your property and align with your dreams.
Once you decide on the best project for your home, explore your financing options, which may include loans, savings, or lines of credit. If you aren’t sure of the best option, consider consulting a financial advisor to help you weigh the factors.