Tax Refund, Home Improvement Projects | Angies List Tips
With the stalled housing market, more homeowners are creating their dream home in their current house. In a poll conducted in 2008, Angie's List members said they plan to spend $11,250 to improve their homes, a 13 percent increase over last year.
Angie's List founder Angie Hicks said the tax refunds and rebates will help with plans, but she cautioned homeowners to think before they renovate.
"Most home improvements are sound financial moves, but homeowners should take a good inventory of their home and prioritize before they invest,” Hicks said. “While you may want to add a new deck, you may need to repair or replace your furnace.”
- The Basics: The roof, furnace and water heater, won’t garner great returns, but are expected to be in good shape. Proper home maintenance saves you money on a daily basis and positions you well for a sale.
- Best bets: Kitchen and bath renovations are expensive but great investments if you are going to be in your house at least five more years. They’re also the rooms buyers pay most attention to and can make or break your sale.
- Good bets: Turning attics and basements into livable space, or adding decks, can bring a better return than adding square footage, and the upfront costs aren’t nearly as exorbitant. Finishing touches matter, though. Wall-to-wall carpeting and drywall in a basement will bring a lot more than cheap paneling and a drop-in ceiling.
- Stand outs: If you have only one bathroom, but all your neighbors have two, a second bath is a good idea, both now and when you sell.
- Curb the appeal: Don’t sink big dollars into extra landscaping, pavers or gazebos that your buyer may hate. Keep it simple with mulch and pretty plants.
Before you think about how to spend your tax check, consider how much you’re getting back. If your tax refund is more than $1,000, you should consider adjusting the amount your employer withholds from your paycheck. You’ll get a smaller refund next year, but you will have had access to your money sooner. A big tax refund isn’t a windfall. It’s you getting back your own money, which you’ve given away in a no-interest loan.
For those who have a financial cushion, now is the time to consider strategic investments, she added. “The old adage of ‘buy low and sell high’ is still used because it actually works. Be sure you’re buying quality funds and stocks, though, so you get to the “high” part when the market rebounds.
*1,388 Angie’s List members took our poll. Responses are representative of Angie’s List members, but not the general public.