7 Steps before renovating your home, Part2
Updated: Nov 22, 2022
Important considerations before renovation of a home
"How much can you spend on your project before it's too much?!"
This is the second of seven part series. Please check back often to see the next one.
Step 2: "What’s your budget?"
The first thing I always ask my clients considering renovation or remodeling their home, is their budget. Surprisingly, most say they don’t know!
Often they view budget as what they think their project might cost. Or, what they possibly would be able to afford.
Although those are valid concerns, most urgent consideration when it comes to your budget is how much your property can afford to be improved. This means depending on where you live and the value of the homes in your area, you can only invest so much in your home, before you have reached the tipping point and the cost of the renovated home exceeds the resale value in your market.
Market, Investment & Property Value:
When it comes to budget and figuring out how to scale your project, you need to try to understand how much is Too much to spend on a home improvement project.
To answer that question, the first thing to do is to develop your market awareness. You have to research and become quite familiar with the property values in your area and neighborhood, in order to know what makes most sense. You have to understand and realize the return on your investment, both in terms of overall scope and the extent of your project, as well as the associated costs.
While not all projects have the same scope of work, it's critically important to be deliberate and strategic about the project goals and consider the market value of a given improvement.
For example, a fresh coat of paint and many other cosmetic improvements more often provide a much higher rate of return than a major addition or remodeling.
In most cases, the goal is avoiding to become the most expensive house in the neighborhood, because as you get closer to that limit, your return on investment (ROI) greatly diminishes.
We often discuss and try to understand how long you may plan to live in your renovated house, as another factor, which is the subject of consideration in the next step in this series.
To make the right decision and avoiding possible pitfalls, you need to consider a few more things before moving forward.
Please check back as we go through the next steps to consider before renovating your home.