For many of us, our home is our largest asset. Maintaining and improving your home can increase its value and build your home equity. In addition to increasing your personal net worth and giving you the means to trade-up, you can borrow from your greater equity using a home equity loan or line of credit.
In addition to the benefits you enjoy from improvements, remodeling can improve your home value. The most valuable improvements tend to include additions to living space or improvements to bedrooms, bathrooms, and kitchens.
To ensure that you get the best home improvement results, it makes sense to use licensed contractors. These include roofers, carpenters, electricians, and plumbers. If you use a licensed contractor, try to obtain more than one estimate or bid for the project. At minimum, an estimate should be in writing and include:
|Contractor general information, including license number.|
|Details of renovation project, including description of parts.|
|Project dates and phases-of-completion when funding is required.|
|Proof of liability and related insurance coverage, including worker’s compensation.|
|Proof of all necessary permits to complete project.|
|A written warranty of project completion, including a refund for unused materials.|
|Promise to clean up work site at project’s completion.|
|Provision that allows you to approve any modifications to the original proposal|
|Payment schedule for funding each phase of the project.|
You can also protect your home value with a home warranty, which covers major home defects for up to 10 years. Many builders of new homes participate in a Homeowners Warranty program. If your home is not new, hire an inspector to help you get a policy that protects your home value.