Have you ever put off doing home improvements because you are afraid of spending too much money on it? There's no reason to give up when you have so many options to make it happen right now. 

Everyone wants to feel the ease and pleasure that comes with renovating a home because, let’s face it - who wouldn’t want to live in an updated home? 

Before we continue though, The return on investment (ROI) of any given renovation project is a function of local market characteristics, the condition of the residential real estate market when the property is sold, and the quality of the work performed.

So, whatever your motivation, we’re giving you some of the reasons why you should start doing your home renovations now:

Improve your home’s ROI

  Ever planning on selling your house in the future? You can transfer the costs to the next owner by increasing your home value! 

               Every year, REALTOR magazine publishes a "Cost vs. Value" analysis that evaluates the costs associated with typical remodeling projects and shows the expected return on investment for homeowners. These payback projections are based on the average building cost at the time and the fundamentals of the residential real estate market.

               Based on this year’s analysis, Adding a wood deck is going to recover 85% (on average) on costs, and up to 83% on Siding Replacement and Minor Kitchen Remodeling.

              Bear in mind that any improvements (especially in a home) if done correctly, will surely increase your home’s worth when it’s time to sell - so make sure to hop on it!

You can put it on your mortgage 

Reaching out to your bank to remortgage or taking out a second mortgage to make those renovations are ways to cut the cost of home remodeling.

If you use a mortgage to buy a house, your acquisition cost includes any additional funds you borrow to complete renovations. If you itemize your deductions, you can deduct the interest on this amount from the mortgage interest.

Remortgaging is a common method of obtaining money in this way. This is when you transfer your mortgage from one lender to another. If you have a fixed-rate mortgage, you should probably do this anyway to avoid switching to the lender's normal variable rate at the end of the term. At this point, depending on your financial situation, the value of your property, and the amount of equity you have in your home, you could apply to increase your mortgage and use the extra money to finance your renovations..

Additionally, you can deduct the interest paid on any equity removed from your home through a cash-out refinance, second mortgage, or home equity line of credit, as long as the proceeds are used to improve your home.

You can use renovations as Tax Deductions

You might wonder if home improvements or renovations are tax-deductible - well, not directly, but there are exceptions - and indirect ways that it would help you lessen your tax burden!

Rental Property Renovations

Do you have a rental property that you want to spruce up? This is great news! If you rent out a section of your property, you may be able to deduct a portion of your adjusted cost basis from your annual property taxes. Only partially rented-out improvements may be completely depreciated. However, changes that benefit the entire house can be written off based on the portion rented out. Repairs are considered essential property upkeep, therefore they may be eligible for a tax benefit.

Home Office Renovations

If you have a room in your home that you use exclusively and on a regular basis for conducting business, you may be able to deduct some expenses from your taxes.

To be eligible for this deduction, the primary place of business and a space that is routinely used solely for business purposes must be located in the home.

Renters and homeowners alike may be able to deduct home office expenses such as mortgage interest, insurance, utilities, repairs, maintenance, depreciation, and rent.

Medical Care Renovations

If you're considering upgrading your home to include a ramp or handrails for medical reasons, you could be eligible for tax breaks. You may be qualified for this deduction if the main purpose of the improvement is to provide you or a resident of your home with access to medical treatment, or if it significantly increases the value of your property. Qualified medical expenses, according to the IRS, include long-term care services, insurance premiums, and transport costs to and from medical facilities, as well as helping to "alleviate or prevent a physical or mental disability or illness."

Capital Improvements

Capital improvements are long-term additions, modifications, or upgrades that raise the value of your house and improve the property. Although capital improvements are not immediately taxed, the IRS claims they may affect the taxes you pay when you sell your home. As a result, after completing a renovation or remodel, homeowners should keep track of the changes they made and save the invoices as proof.

The property needs to fulfill the following requirements in order to be considered a capital improvement, according to the Internal Revenue Service (IRS):

The improvement substantially adds value to your home.

The improvement prolongs the useful life of the property.

The improvement is permanent.

This may include - Quality of life replacements such as attic insulations, new septic systems or new features such as new built-in appliances, a new driveway, siding, etc.

Increasing the cost basis through capital renovations may result in a lower taxed capital gain when you sell your property. This can help to reduce your tax liability. Unfortunately, basic maintenance and repairs are not included. However, these minor repairs could be part of a larger renovation project that boosts the property's value, extends its useful life, or adapts it to new uses.

Renovation is more than just enjoying the benefits of living in an updated home; it is also a way of caring for your home in order to keep or raise its worth when the time comes to relocate or sell a portion of your property. You'll thank yourself later!

Don't know where to start? We know a lot of great folks who can help you get started. Visit www.thewilliamsteam.com/connect to get started!