Home Improvement Projects: Considering Home Value and Equity

By Karen Lawson
Home Worth Columnist

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Getting the maximum return on home improvement projects can depend on a number of factors. Are you planning to sell your home right away? Does your home need major repairs or renovation to bring it up to local building codes? Which projects are essential, and which can wait? All can depend on how much home equity you have and your reasons for making home repairs or renovations.

Home Repairs: Planned and Unplanned
The worst home repair projects happen unexpectedly. The dishwasher goes out and floods the kitchen. Something goes haywire in the master bath. It rains and you find out your roof is leaking.  Aside from these types of emergencies, it's generally a good idea to plan home maintenance and repairs in advance.  Maintaining and updating appliances, plumbing and electrical features can increase home worth and reduce risks.

Home improvement experts often cite kitchen and bath renovations as the projects that can increase home value.  If you're planning to sell your home, a fresh look in these areas can add appeal to your home over similar listings.

Home equity financing can provide funds for home improvements. Of course, keeping some home equity intact acts as a hedge against declining real estate markets, but well-planned home improvements can add to home value.  Establishing a home equity line of credit can be useful for paying for emergency repairs. A home equity line of credit allows you to spend what you need when you need it, up to your credit limit.  This type of financing can provide a convenient alternative to high interest credit cards or personal loans. Calculator tools found on home improvement and home value websites can help you decide how to prioritize home improvement projects.

About the Author
Karen Lawson is a freelance writer with extensive experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.