If you’re not in the market for a new home, it may be the perfect time to spruce up your current one with a remodel. If home renovations are in your future, here are a few simple tips to help you cover the costs to make your old home new again.
How much should I budget for remodeling?
You can consider small updates like a new coat of paint or bigger projects like redoing a bathroom. Consider which improvements will be most likely to boost your home’s possible future resale value or provide your family with the extra room it needs to grow. Either way, look for the project with the least amount of investment that could bring the highest return.
Go online for information about project costs or use a renovation budget calculator to help you estimate the expense for each project. According to major home repair sites, the kitchen is the most expensive room to renovate with bathrooms running a close second.
If you can’t afford to complete all your projects right now, pick your priority.
Decide how you’ll pay for the project
Now that you’re done with budgeting, make sure you have the money to cover the project. Your savings is an option, if you can use some of that for your project and still maintain a cushion for an emergency.
If your savings is not enough, consider applying for a home renovation loan. If you don’t have enough equity in your home, a personal loan may be a better option. Alternately, a low-rate credit card may be an option for covering smaller home repairs. Your Credit Union can help you determine what type of credit will best meet your needs.
With any line of credit, make sure your overall household budget includes future repayment expenses. If not, you can always scale back your home improvement plans or postpone getting started until you’ve saved a little more.
Consider who will do the work
To save money, look for DIY opportunities and ideas. Ask a friend or family member for help. That said, there are definitely times when a licensed professional may be the better option, or required to get any necessary permits.
Even with smaller jobs, it may be prudent to hire licensed professionals for things like plumbing, electrical work, or any task where rookie mistakes might cost you more in replacement materials (or headaches) than you saved in labor costs.
If you plan to hire outside help, be sure to get at least three different estimates. Consider which contractor comes with the best references, which you think you’d feel most comfortable working with, and which has the most reasonable and realistic budget.
Keep tabs on the work and the agreed upon plan to stay within your budget.
The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.
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