There’s been a big uptick in purchases at home improvement stores. Stocks are rising and revenues climbing at some of these retailers during a time most other businesses are struggling. It’s no wonder. People are spending more time at home, looking for something to do, and fixating on home issues.
According to Baron’s, “. . . home improvement spending rallied 16.4% year over year in May, with the adjusted figure coming in up 5.2% for the three months ending in April.” Home Depot and Lowe’s “comparable sales climbed 6.4% and 11.2%, respectively during this time.” Yes, as we’ve been hunkering down, we’ve been tinkering with our living spaces.
Retirement planning with real estate
Typically, people think about 401ks and other traditional retirement savings vehicles when they calculate assets. As you plan your investment strategies and review your net worth, don’t forget to include real estate.
What’s also important to consider, though, when you decide to invest time and money into your home, is the return on investment. Of course, if your plan is to live there until you die and you’re not concerned about leaving a legacy, improvements that simply make your life better are fine. But if you think you might sell some day, or want your home to be part of an inheritance, it pays to be pickier about what you do.
According to Bankrate, home improvements that get the best return on investment include:
- Garage door replacement
- Switching out stone veneer for portions of exterior siding
- Minor kitchen remodels
- Deck additions, and
- Siding replacement
What you get back on these investments depends on a lot of other factors. Things like house value, neighborhood, and your area housing market are things you can’t control. Issues you can impact include how soon you sell after making improvements and the quality of workmanship on the project.
People are improving their net worth by enhancing their home conditions. As you dive into these projects, consider how what you do could make your house a bigger asset in your portfolio. Sure, more comfortable living is a good reason to choose a project, but why not do so with an eye toward what other people see as more valuable?
