With people spending more time at home than ever before, the time is ripe for renovation. Unfortunately, costs are rising rapidly – according to KTEN, the cost of the average home renovation project rose 20% in 2020-21. This has made it not only more difficult for homeowners to know where the value is in the market, but also to fund the project in the first place.
Indeed, a good quality renovation project needs proper funding, and that’s the first place to start when looking at renovation – how will you get the money to pay for a good job?
Assessing yourself
You shouldn’t dive head first into renovation at any point, and especially not with the volatile financial conditions most housing markets are experiencing. It’s wise to look at your financial situation and assess where potential barriers will arise. Do you really want to renovate, or is your property fine as it is? Will you add value to your home, or is it something you’re prepared to lose money on? Can you finance the entire project? Many homeowners will look to refinancing to power through any changes, and right now it’s time to strike while the iron is hot – according to Forbes, 2022 will likely see a broad range of increased mortgage rates, and that will mean refinancing is less valuable in the long run.
Building resilience
Even with money in hand, you will face shortages and delays. Reuters note that US homebuilding dropped to very low levels at the end of 2021, which coincides with material shortages. This, in turn, will make it difficult for contractors to obtain what they need to complete work for you – or, at least, at a reasonable price. As always, that will fall back on to you. Expect delays and be in it for the long run. If you want a good job done, at a reasonable price, you may have to wait.
Adding value
Consider, also, whether your renovation can pay you back in years to come. CNBC highlights the key house building projects that add value to your house, in particular garage door replacements. Consider changing your project to meet the demands of the market around you – the materials that are available, and the relevant costs. If you can build something that will add intrinsic value to your property, you’ll be securing a long-term investment on your renovation. This can help resale value in the future or, if you’re looking to stay in your current property, improve the value of your assets. This, then, can be used to generate improved lines of credit in the future – enabling bigger and better renovations.
For instance, a kitchen counter remodel is a great way to add value to your home. Upgrading your kitchen counter can give it a fresh, modern look. Plus, it can significantly add resale value if you ever decide to put your house on the market. Additionally, you can use the improved look of your kitchen counter to serve as a selling point for potential buyers.
Don’t rush into renovation. The market is a bit wild at the minute, with excess costs and delays endemic. Instead, look to find value in your property and redevelop areas that will generate the greatest ROI. That will set you up for wider scale renovations in the future, when it’s more cost effective.