A significant proportion of homeowners opt to remain in their homes. Rather than selling, they choose to make improvements in an attempt to improve the quality of life or even to make the house appealing to potential buyers.
Statistics show that $316Billion was spent in 2017 by Americans in remodeling their homes; which was a rise from the $296 paid in 2016. Almost $24 million is invested in kitchen remodeling wile 29$ million is spent on bathroom renovations. So, how do ensure that you make the most of your budget? Below are five tips for homeowners looking to renovate their homes under a budget?
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1. Make a plan and consider financing options
First, make a budget and an estimate of the amount of money you need for the renovation. The worst mistake you can make when is failing to have a plan for the significant details such as materials, cost, time and design. You need to be realistic from the start.
As for the design, you can use design tools to theorize your project. Consider adding a healthy buffer of between ten and 15% to both your financial and time to account for unforeseen expenditures.
Ideally, cash is the best option to pay for home improvements. However, if you have budget constraints, consider seeking alternative methods, for example, tapping into your home`s equity.
Home Equity Lines of Credit, commonly known as HELOC, are getting popular by the day. They lend money to homeowners seeking to make renovations. Data analytics show that between the first quarters of 2016 and 2017, the average homeowner acquired estimated $13,400 in equity.
A home advisor stated that homeowners living in the Northeast and we spend the most on home renovations. Thus, they take out a significant home equity loans to fund their home improvements.
2. Seek advice from an expert
It may be nice to try a DIY approach for some things such as plasters, raw materials, and paint. Nonetheless, DIY can be challenging especially if you lack the expertise, experience or skillset.
Therefore, it is necessary to consult an expert; it can be an interior designer or even a realtor. Invite them to the house you are looking to improve and share your ideas with them. It may be a costly alternative but not as expensive as a poor design. Moreover, it gives you numerous ideas and the best options for the renovation.
Real estate professionals keep on emphasizing the need of replacing sidings, windows and entry doors to boost curb appeal. Remodeling magazine in 2017 while reporting on the Cost vs. Value observed that exterior project has a national average of 75% payback, while interior projects returned only 64%.
Take an example of a steel entry door. Its replacement will cost $1,100 (estimate). It is a curb appeal project which is expected to return a significant amount of money, and an estimated 85.6% of costs earned on sale.
3. Choose improvements that add value to your home
Specific home improvements will significantly add value to your home than others. The value can be in term of investments if you are looking to sell or make it appealing if you are looking to make the house your ideal home.
As a homeowner, you should consider improvements such as reducing the home`s energy bills especially cooling and heating. Use energy efficient upgrades to make your home comfortable. Moreover, it will also boost the resale value particularly in areas that have extreme weather conditions.
Consider attaching loose-fill insulation in attics to avoid air leakage. The padding is a measure that increases value over cost, following the Cost Vs. Value report. This project is likely to cost $1,258 on average but has a payback of 108%. This also allows you to look into your property’s future should you choose to sell it or tap into your home’s equity through a reverse mortgage. Getting one checks into your home’s appraised value so you really ought to consider value-adding projects to your home improvements
4. Choose the right contractor
Earlier, we discussed the $17 million spending on kitchen remodeling. Conversely, these remodeling jobs need a lot of labor and skill, which includes installing new appliances, moving plumbing or electrical lines, installing cabinets, lighting, and countertops.
Therefore, for the best renovation, you need the best person who is right for the job. With the right contractor, you don’t have to worry about low quality work which you need to redo and repay.
The best way to hire a reliable and qualified contractor is through seeking recommendations from friends or anyone who has had similar renovations done for them. On the other hand, you can check for contractors through referral sites. Always interview contractors and ask for referrals before hiring them.
A simple job tends to have a high return on investments; which makes it easy to find your way to substantial renovations. For example, in most cases, making budget-friendly bathroom upgrades is a prudent decision.
5. Know your audience
It is essential for anyone renovating in attempt to sell the house. Understand the needs of your audience before embarking on any renovations. Ensure that the improvements you intend to make are coherent with homes around your area. For example, it will be difficult to sell your house if it is the most expensive in that area.
Familiarize yourself with your audience and meet their requirements. That is if most buyers are looking for a home that has an extra bathroom, customize your house to have that bathroom. Besides satisfying a customer, you will have good returns for a high sale price.
Remodeling is a good boost for the country`s economy, but it can be a risky venture for homeowners. Home improvement is not a simple task. Renovating a house and making it your dream home needs plenty of time, resources, and even expert advice.
Some essential tools for homeowners that will help them make renovations within their budget include paint and paintbrush, vents and pipes. If you are not doing major renovation projects, it is prudent to save some money annually to cater for repair costs. You could also use a maintenance calendar to ensure your home is in a tip-top shape throughout. When renovating to sell, know your target audience.