Appreciation in home values is one of the most common ways to build wealth available today. Purchase a home, take good care of it while your pay off the mortgage and the home appreciates, and your home will remain a valuable asset when you are ready to sell it. While housing markets, like the stock market, see cycles of peaks and valleys, the long-term trend is appreciation.
Keeping your home in good shape makes economic sense when you approach the process as an investment with a return. Like your car, requiring oil changes and tire replacement when worn down, your home has maintenance requirements. You must keep the gutters clear and flowing for them to work properly. You must regularly inspect and update exterior caulking where water intrusion can cause damage. Keeping a good coat of paint on exterior surfaces, and a new roof every 20-25 years, are just some examples of the cost of home upkeep.
After regular maintenance and repair, I suggest that homeowners consider home improvement projects as either a refresh or remodel. Changing paint colors on walls is a refresh. Swapping a sliding glass door for a French Door, replacing your above stove vent hood, and adding a backsplash to painted walls between the counter and the cabinets in the kitchen would all fall into the ‘refresh’ category. These are projects that make the home a nicer place via a series of modest incremental updates.
At some point the incremental updates are not enough and that is when it is time for larger projects. Changing the paint and lighting, and adding a backsplash, gave the kitchen a new lease on life. But now, those 40+ year old cabinets and Formica counter are both out of fashion and simply worn out. It is time for a new kitchen.
Similarly, bathrooms reach a point when you can tell the era they were built from the materials in them. We still see pink, avocado green, and harvest gold tile, with toilet and bathtub in the same color. For some this is fashionably “retro” and for others it is time to gut the bathroom and start over. The good news is the old bathroom lasted 40+ years, and the new one should as well. Remember that when picking out tile colors/patterns. Do not select something trendy that will be out of fashion in a few short years.
Approaching home upkeep, refresh and remodel projects as an investment in an appreciating asset helps soften the financial impact of such projects. Your home will be worth more, and you will enjoy it more in the meantime, if you take care of it.
