Best Value Investments: Home Improvements For Financial Gain
Home improvement projects can be stressful, and expensive, but the fact is that sometimes these upgrades are unavoidable. When it’s time to make improvements, then, it can help to focus on changes that offer financial benefits. From tax deductions to energy savings, many of the most common home projects offer financial gain as part of the package, relieving some of the pain associated with project costs.
Choose The Right Funding
The first step to saving on your home improvement projects is to choose the right funding source to pay for it. If you pay for your projects in cash or put them on your credit card, you won’t get any benefits, and your credit card will rack up fees from interest. If you take out a home equity loan, however, you’ll be able to deduct any interest you pay on that loan when it’s used for substantial improvements, meaning you can pay for the work slowly without interest.
Seal Up Your Space
One of the simplest and most financially beneficial improvements you can make to your home is sealing up your doors and windows to prevent energy loss because as windows and doors age, your home becomes drafty. By repairing air leaks around your doors and windows, then, you can save money on your energy bills – as much as 20% annually. And, for most air leaks, all you need is caulk and weather stripping. Once you’ve filled the gaps, you can look for light around the doors and use incense to check for air leaks around windows.
Amp Up The Energy
Another way to earn on your home improvement projects is by installing energy-generating solar panels or a solar water heater – and the benefits here are twofold. First, through 2021, homeowners can receive a significant tax credit for the cost of solar panel installation; rates will decline each year until the end of 2021, though, so you’ll benefit most if you upgrade soon. Additionally, solar-powered systems will reduce your energy bills and, depending on how much you produce and how much you need, you may even be able to sell some of your energy back at a profit.
Focus On Family Health
Does anyone in your family have a health condition? It can be anything from allergies to a movement-limiting disability that requires home modification; if you can justify a repair or improvement as a medical expense, you can deduct it from your taxes. This is often the only reason that families can afford to install stairlifts, wide hallways, or retrofit their bathrooms to accommodate a disabled family member. Many families also use this tax deduction to install sensory spaces for autistic children or add ramps to the exterior of the house.
Make Room For Work
Finally, if you or your partner work from home, even part-time, take this opportunity to create a formal workspace, whether by walling off an area of your house or converting a guest room into an office. Creating this space is important because you can deduct the square footage of a home office from your taxes. Additionally, if you have a home office, you can deduct a portion of your electric and internet, and even the costs of creating the office in the first place, right down to the paint.
Ideally, when making home improvements, you want to be able to take your time, upgrading one area at a time, or move out and have professionals complete the repairs quickly; the goal is to make sure you don’t displace your family for the long term. Once the repairs are done, though, you can recline in comfort in a space that’s warm, efficient, and accessible to everyone.