Home improvement is the process of renovating or repairing a home, building an addition, or making changes to existing rooms. These projects often include redoing or updating a kitchen, bathroom, bedroom, or living area, but can also extend to the outdoors, including landscaping and installing a deck or patio. Home improvement projects can increase the value of a home and make it more comfortable to live in.
The most important consideration for homeowners planning a home renovation is cost. Data from our 2023 Homeowner Activities and Sentiment Tracker show that 61% of those who postponed or canceled a project in the previous quarter did so because of cost concerns. That’s not surprising; the average home improvement project costs $5,246.
Choosing the right home improvement projects can help maximize your return on investment. Be sure to prioritize projects that will improve how you use your home, and avoid costly upgrades with a purely personal appeal (that koi pond out back may not be something buyers are looking for).
It’s smart to keep detailed records of your expenses related to home improvements. Documentation will be helpful in the event of an IRS audit, or if you sell your home and want to claim any resulting capital gains tax refund. Keep a dedicated file for receipts, contracts, and documents, and be sure to itemize every expense with as much detail as possible. This will include work description, costs for materials and labor, and the brand or type of product used.