How to Control Expenses on Home Renovation

Home improvement projects can increase your home’s resale value. Find out how you can improve your home while avoiding extra expenses that will increase the cost of the project.

Home improvement projects surged at the height of the pandemic as people spent more time at home due to their work-at-home arrangements with their employers. To make their homes conducive to working and increase productivity, many homeowners renovated their homes.

Some homeowners even indicated that they are also planning to continue their home improvement work well into 2021. If you are one of these homeowners, you might want to pause for a while and check if you are not throwing away your hard-earned cash to home improvement projects that might not add value to your home.

Here are some things you should consider so that you can avoid making unnecessary expenses on your home improvement projects.

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Consider the Value the Renovation Gives

One of the reasons some homeowners renovate their homes is to increase their resale value. If you are one of these homeowners, you should look into the value that the renovation gives to your home. You should focus on home improvement projects that can increase the resale value of the home. Many home improvement projects cost thousands of dollars, but they do not increase the home’s value by the same amount the homeowner invested in it.

For instance, if you’re spending a thousand dollars for repairing the concrete driveway of the house, will it increase the value of the home by the same amount or higher? Before you push through with the renovation, you should check if it’s worth it. A $50,000 investment on a new bathroom will not make sense if you can only recoup around 50 percent of the cost compared to a minor kitchen renovation that allows you to recover around 80 percent of the cost.

These are some things you should consider before going ahead with the project. And one way for you to know if the upgrades you are planning can increase the value of your home is to consult real estate agents. They might have an idea of the returns you will get when you renovate your home.

Set Aside the Budget

To ensure you can finish the home renovation project, you should set aside the budget for it. It is important to have the total figure ready before starting the project. For instance, if you plan to install new tiles on the kitchen floor, you should compute the total cost of the project before you start it. The budget should include the cost of the materials and labor costs if you plan to hire someone to work on it. Additionally, adding an extra 10 to 20 percent to the total is necessary to cover any cost overruns.

You can also check with people you know who already completed a similar project and ask them how much they spent on it. They can even provide insights on how to complete the project efficiently and at a lower cost.

Look for Suitable Funds

If you find out that your available funds cannot cover the cost of your home improvement project, you should look for funding sources to allow you to work on the project. You can consider using the stimulus check you received but did not use yet. Using your available funds allows you to avoid paying interest on loans for the home improvement project you are planning.

But if you need to look for a funding source, make sure to look for a source that does not burden you too much. You can consider a personal loan, refinancing cash-outs, or a home improvement loan from the government. It is important to weigh the advantages and disadvantages of these funding sources.

For instance, loans from private financial institutions can be easy to obtain, but their interest rates are high. On the other hand, government funding might have low interest rates, but the amount might be small or they focus on specific areas in the country.

Look for Reliable Contractors

After solving your funding issues, it’s time to look for a contractor who can work on the project. You might be tempted to work on the project itself. But if you do not have the skills and experience, you should leave the work to professionals to avoid any costly mistakes on your part.

You should look for a contractor who has all the proper licenses and has a good standing in a local or regional trade organization. You should also check with the Better Business Bureau if the contractor is listed there. Check for any complaints about the contractor and how they resolved the complaint.

Renovating your home is a major project that you should plan carefully. You shouldn’t leave everything to luck to avoid losing a lot of money instead of increasing the value of your home.