Whether you’ve purchased a home with the idea of renovating it or you’ve been in your home for years and it’s finally time to update – a home renovation is a journey. That journey may begin with smaller home improvement projects that eventually results in a multi-room home remodel or a total overhaul. Each person’s home renovation will be unique with different expenses and surprises along the way.
While home renovation TV—such as HGTV—shows have become renowned for at least one thing going wrong, your home improvement project or home remodel may feature more than just one or two. It’s not just the home or contractors who may throw a curveball into your plans, but other household occupants like a spouse, children, and pets that can add to expenses and complicate the renovation.
Make sure your budget stretches as far as it can by answering these five questions to create a project outline and renovation mindset that can withstand the unexpected.
1. Why renovating?
Before tearing down a potentially load-bearing wall or relocating the kitchen, first determine what future you see for your home. Are you undertaking the project to improve the overall appearance of your house, affect the resale value of your home, or improve the functionality? The answer to this question will greatly influence the depth and cost of renovations and tell you what type of renovator you are.
The Beauty and Aesthetic Renovator
Be it by a professional or a DIY-er, 18 – 19% of home projects were undertaken to improve the beauty and aesthetics of the home, according to the National Association of Realtor’s 2019 Remodeling Impact Report. Anesthetics renovation can have a broad-ranging budget, depending upon the depth of the project.
The Re-Seller Renovator
If you think you might need or want to sell your home sometime in the future, make certain you won’t lose reduce your resale value due to renovations. While it may feel like every renovation is undertaken with this idea in mind, NAR’s 2019 Remodeling Impact Report found only 8% of home projects undertaken fall in-line with protecting value. However, even if this isn’t your main motivator for undertaking a home project, the mentality of looking for lasting trends and the best deals for durable products is beneficial.
The Functional and Livable Renovator
The third type of renovator has the potential to need a large budget. Livable may mean adding a second bathroom to the house, or it may mean adding a closet organization system or relocating the kitchen. Either way, 35 – 41% of NAR’s 2019 Remodeling Impact Report respondents chose to undertake a home project to create better functionality and livability space.
Once you know why you are renovating, it is easy to know exactly what projects to undertake. While you may have already had an idea of the projects you wanted to do, once your motivation is clearly defined you can prioritize, cut, or add to the plan as needed. Maybe before undertaking a beauty and aesthetic home remodel project, functionality and livability project must be undertaken first. While deep, teal walls may reflect your Pinterest board perfectly, the paint may be marred by the project that’s turning a closet into a powder room. Having an understanding of the process and being patient is key to getting the job done quickly, correctly, and within budget.
Know your renovation motivation to narrow down the projects you’re looking to undertake. HGTV has listed the top 15 home updates that will pay off for any type of renovator.
For the beauty and aesthetic renovator, a garage door or exterior siding replacement may fit the bill. For the re-seller, a kitchen renovation offers a great current and future payoff. Bathroom upgrades like a walk-in shower and adjustable mirrors offer functionality and resale value and are perfect for the functional and livable renovator.
3. Will this be a DIY or professional job?
Depending upon your skill level and comfort with different tasks, a project may be completed entirely with your own hands. However, while the internet may make it seem like the answer to any question is on a discussion board or video, sometimes a job is best left to skilled tradespeople. Anything that may require permits, code regulations, electrical, or plumbing may be best left to the professionals unless you’re willing to experiment and learn as you go. Sometimes hiring professional help is just a matter of convenience, and ensures the job becomes completed on time.
Whatever route you take for your home improvement project, be certain to shop around for quotes from local contractors, and figure out what your own time in the project would cost. While the DIY route may initially seem cheaper, there can be unexpected costs, which leads into the next point . . .
There’s nothing quite like a plumbing or electrical project developing into a full-blown disaster due to previous upgrades (or in some cases, no upgrades) leaving cumbersome and dangerous problems behind. While some costs may be unknown until the drywall is down, renovators may be able to prepare themselves for the unexpected. Make sure you’re prepared by setting aside at least 10% of the total budget for any contingencies that may arise. Depending on the scale of the home renovation, this may be too little or not enough. If the project is small, for example, repainting the children’s bedrooms, then a 5% contingency may be enough. Alternatively, do you have to move to a hotel room for a couple of nights? Whatever the case may be, always makes sure to respect the 10% contingency when undertaking structural renovations – who knows what you may find?
5. How will you finance the project?
Perhaps the most important question is how your home improvement project will be financed. If it’s a planned project, saved money may be able to cover the entire cost of the project. However, if the unexpected happens and unforeseen costs arise a line of credit may need to be established. While some sellers may offer financing options, usually the buyer will have a choice between seller-financing or a rebate. Often, a rebate may offer the best savings, and luckily for Empeople (Empeople) members, our loans are quick and easy to apply for to secure funding.
For those who have already paid part of their mortgage and now have equity – the difference between the value of the home and the remaining balance on the loan – there are choices. Renovators can choose between seller-financing options or borrowing against the equity in their home. A Empeople home equity loan may offer not only the best rates but the highest line of credit – up to 100% of your home’s current value for borrowers with good credit. Empeople’s home equity calculator can help you figure out how much you’ll need to budget.
For those who may have purchased a house knowing renovations were already in-hand, a Empeople’s home improvement loan is just as easy to apply for. Our Online Mortgage Loan Center makes it easy to get started. You also can discuss your options with your Empeople representative and they can help guide you into making the best decision.
Whether you decide to pursue a Empeople home equity loan, a Empeople home improvement loan, or spread your debts through various forms of seller financing, may your shiplap always be straight, wood without termites, and your timeline more consistent than your neighbor’s reminders of the sound ordinance laws. Good luck and love your home!