Home Improvement – Not All Home Improvements Are Created Equal

Home improvement

Home improvement is a popular way for homeowners to step up their living spaces, add value and improve curb appeal. But it’s important to understand that not all improvements are created equal — some actually decrease a home’s resale value and can turn off potential buyers.

The best home renovations typically include projects that step up a house’s energy efficiency or make it more attractive to the eye, says Mischa Fisher, chief economist at contractor search service Angi. He says a good example is replacing siding, which can provide a 69 percent ROI and can help cut utility bills. Another high-return project is replacing windows, which can boost a home’s look and also help keep it more energy-efficient.

Other projects that may be worth the investment include converting an unused garage into a living space, adding a bathroom and updating the kitchen, Fisher says. He notes that a new master suite with its own bathroom, walk-in closet and possibly dressing area is often the top requested feature by homebuyers.

Upgrades that may decrease resale value include any overly customized or luxury options. For instance, marble floors are not as appealing to a prospective buyer as standard vinyl tiles, Gordon says.

Another thing to keep in mind is that not all home improvements are tax deductible. For instance, in New York State you’ll only be able to claim a tax deduction on materials if you have documentation that the project is a capital improvement. This can be achieved by submitting a Form ST-124, Certificate of Capital Improvement, which can be obtained by contacting the Department of Taxation and Finance.

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