What can I expect to pay for home improvement expenses after I buy a home?

 

First, let’s get our definitions straight:  Home maintenance and repair projects are projects that need to be done to maintain the integrity of your home.   They include areas like roofing, furnace maintenance, windows, exterior painting and electrical. These projects need to be addressed first in order to efficiently run the home without jeopardizing safety or energy use.  Once these projects are taken care of, it is then time to take a look at home improvement projects in other areas in the home.  By definition these projects include anything done to improve the look or function of your home, but are not strictly necessary for its maintenance, integrity, or occupancy.

 

Kitchens and baths are among the top rooms people consider for remodeling first, and are often improvements considered as buyers shop for a home.  Buyers also often explore the possibility of making smaller rooms bigger, or making other additions on to the existing structure.  In the warm weather months or climates, improving the landscaping is another high priority for many new home owners.  All of these improvements are personal choices, not necessary changes, that were most likely planned on or made prior to a home purchase – but what is a reasonable amount of money to spend making a home “your own”?

 

The National Association of Realtors Profile of Buyers has gathered data to best help answer the question of what to expect for home improvements once the home is purchased.

·         The typical buyer spent $4350 on home improvement projects within the first three months of their home purchase.

·         Repeat buyers typically spend more than first time buyers; $5330 compared to $3070.

·         28% of first time buyers spend less than $1,000 on home improvement projects.

·         Buyers who purchase new homes typically spend slightly more than those who purchased previously owned homes.

·         Home buyers who plan to stay in their homes for one year or less spend the most money on home improvement projects within the first three months, $5830.

It would be prudent to examine your list of desired home improvements and identify those that may qualify for a tax credit.  Tackling these projects first may help you have the necessary money to tackle other projects in the future.  Please consult your tax accountant before expending any money – you may even find that you can afford to tackle a project that you would have thought too expensive, or even become aware of improvements you could make that would save you money in the long run.  For example, new laws provide tax credits for making your primary residence more energy efficient. You may want to consider these improvements as an advantage over others that do not qualify in the same manner.

Ultimately, what you spend on home improvement projects is a personal decision - but a little homework can let you know if the changes you may make to a newly purchased home are reasonable as compared to market trends.  You may also save yourself some money by prioritizing projects for maximum tax benefits, or even energy efficiency.

 

 

Suzanne Damon

Member of the Greater Manchester-Nashua Board of Realtors