Making Home Improvements in a Recession

April 24, 2009
by Rachel Balik
The investment in your 401k might not pay off as you’d hoped, but the investments you make in improving your home will not only bring you a bit of joy right now, but may reward you later when this whole thing blows over. But what are the best things to fix up when your budget is tight? FindingDulcinea explores home renovations during tough times.

Assessing Your Investment

If you’re holding off on selling your home due to a tanking market, choosing the improvement that will yield the greatest return is a good idea. Even if you plan to stay in the home you’re fixing up, you might still like to know the value of the improvements you’re making. The CNN Money Calculator can help you crunch some real numbers that will help you decide if your renovation is financially sound. The calculator is based on a report from 2006, but you can still use it to compare two or more renovation proposals.

Getting Ideas

While the calculator can help you evaluate how your investment will turn out later, there are actually home improvements that will help you start saving right away. Why not pull a Barack Obama, and save the environment and economy at the same time by making your house more energy efficient? The only difference is that his success is still uncertain, but yours is pretty much guaranteed, Forbes says. Reduce your power and heating bills and earn hundreds (or even thousands) of dollars in tax credits for making energy-saving renovations.

A recent Design Trends Survey from the American Institute of Architects confirms that today’s homeowners are planning green renovations. Although some kitchen and bath improvements have tapered off during the recession, there’s an increased focus on projects in the kitchen and bathroom that save water or energy. In fact, from 2006 to 2008, the number of people who put a computer space in their kitchen went down and the number of people who installed a recycling center went up: now they are equal. However, the number of large-scale construction projects has decreased.
In general, as people tighten budgets, they’re abandoning big, pricey projects in favor of small, slick remodeling projects. But that doesn’t mean that all the fun, fancy stuff has disappeared from people’s radars. David Drexler, who owns a shower door company, explains that when people can’t sell their homes, they often long to spruce them up. Drexler says business has slowed down for him, but there are plenty of people still interested in installing beautiful, artistic shower doors. There are plenty of small projects you can choose to improve your house—and they might even make you happy to stay where you are.

Home remodeler William K. Millholland says that recession-conscious renovators generally start in the kitchen, and that bathrooms come next. Echoing Drexler, he confirmed to The Washington Post that most people who want to renovate are choosing small, affordable and green projects that still provide the satisfaction of bringing something new to their homes.

When You Don’t Have a Choice

But Millholland warns that there are less glamorous projects that shouldn’t be put off, such as “loose bricks on your stoop.” He warns never to delay when there’s a risk of water damage, electrical problems or trouble with your roof. The recession makes everyone more money conscious, but there are times when you simply have to spend money to prevent huge and potentially dangerous damage in the future.
Maybe you’ve got to reshingle the roof, get a new fridge or give the place a new coat of paint. But plan carefully: the Consumer Reports blog insists that timing is everything. In fact, even if you’re taking on projects that seem financially taxing in light of the recession, completing them at the right time can save you money. For example, did you know that there are ideal temperatures at which to lay down concrete or test soil? Or that the best refrigerator sales are in May and June? Other tips: do outdoor painting early in the season, but hold off until it gets warmer to get indoor jobs done; that way, you can air out your home more effectively.

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