The best reasons for improving your home may not be the ones you think of right off the bat. Here are five to consider:
Sometimes it’s better to stay put
There are many compelling reasons to move, of course – relocating for work, upsizing for growing families, downsizing for empty nesters, or just needing to be in a different area. However, if these aren’t immediate factors in your case, consider staying put. Moving is not cheap. For a $200,000 home, there can be as much as $25,000 in transaction costs. If you like your area, why not spend that money to improve and renovate the home where you already live? The money not spent to sell your residence and buy a new home can be used to get new appliances, fix the roof or install an outdoor spa.
End the functional obsolescence
Construction preferences, like decorating styles, change over time. What worked when a home was first built may not work today. We’ve all recoiled at the sight of a decades-old kitchen in an otherwise beautiful home or window and flooring treatments that age a room beyond its years. This isn’t just true for décor. It also applies to the actual layout and construction of the house.
If you don’t need a walk-in closet for a guest room, perhaps that space would be more efficiently used as an extra bathroom. If you’ve spent years hauling laundry to the basement, maybe moving the washer/dryer to the main floor is the best improvement you can make for your needs. Or, if you want to create a greater sense of space, consider opening up a living room with sliding glass doors and adding a deck to create a modern, indoor-outdoor living area.
Maintain the basics
A 2015 study by Harvard’s Joint Center for Housing Studies shows that homeowners spent $192 billion on home improvements in 2013, with only 30 percent of that going to discretionary projects that improved a property but not the home’s structural integrity. Most of the spending went to repairs and maintenance.
Making your home and yard more energy- and water-efficient can have immediate and long-term savings. Maintaining the overall repair of the home, including major items such as the roof, electrical and plumbing, is also a good investment as it can save on bills now and help prevent costly repairs in the future.
Tap into equity
With interest rates at or near historic lows during the past few years, millions of owners have locked in numbers they don’t want to give up. At the same time, home values in many areas have gone up and the result is a nest egg of increased equity.
According to the Federal Reserve, between 2010 and the third quarter of 2014, home values increased by $4.78 trillion. At the same time, mortgage debt actually fell from $9.915 trillion to $9.373 trillion, a difference of $542 billion. The net result is new equity worth more than $5 trillion.
These loan-to-value figures allow owners to obtain cash-out home refinances or home equity lines of credit, financing that can be tapped to fund home improvements. If you aren’t planning to move anytime soon, you can use this capital to make your home the best it can be.
Probably the best reason to make repairs and improvements is to create a home you love. If new landscaping, a dream bathroom or a spa is going to enhance your lifestyle, then why not? A home should be more than a place to avoid the rain – it should provide comfort and enjoyment. For many owners, upgrades and renovations are the fastest path to better living.