First steps to your Renovation
Let’s not sugar coat it, home renovations are a horrible, tedious process, and nobody likes them. Now that that’s off our back, it can also be an exciting and creative process especially when you’re finished and can enjoy a nice glass of wine in the 2.0 version of your house. The most important thing you have to do when starting the process is to figure out if you will be doing the renovation for the purpose of selling and maximizing your bottom dollar or if you are doing this for your own personal enjoyment. Your approach should differ depending on that answer. Set the time to do it right from the beginning in order to save yourself unfortunate setbacks down the road.
You must use the principal of increasing and decreasing returns. Each dollar invested needs to return a dollar or more of increased value and stop when each dollar invested returns less than a dollar in value. Do not over improve a property! Let’s say our subject property is currently worth $200,000. It would not be wise to put in $25,000 in renovations if the most you can get is around $225,000. However, it would be wise to put in $25,000 if you can justify a sales price of $250,000. It is also very important for you to know your neighborhood. If your neighborhood does not support a certain price range, and you are the only one with state of the art updates, it will be difficult justifying the monetary value of the investment.
If you are planning on doing this for your own personal enjoyment then you must ask yourself how long you intend to live in this house. If your future holds calling this house home then go crazy and have fun building your castle. If you are on the fence and might sell in a few years then the cost you put in must rationalize the income generated when you sell.
How to create the perfect budget
Don’t try to cut corners by hiring cheap labor and picking cheap materials. In most cases you’ll have to pay more than you would have originally paid to fix the mistakes. Make sure there is a buffer in your budget because anything can happen when doing a big renovation.
Choosing the contractor for you
Before picking out a contractor you must do some preliminary work for two reasons. First, you want to know what questions to ask so you don’t get used and abused by the contractor. Second, you want to be able to keep a close eye on what they are doing in case things get out of hand. An easy way to decide if you found a good contractor for you is to see how fast they return your calls. A contractor that always picks up or returns them right away will help keep your anxiety levels down and will most likely keep you in the loop throughout the process.
Common tips that homeowners tend to forget
- Choose the correct lighting that will go with the colors to your home
- Bigger is always better when it comes to hallways, stairs, and doors. You don’t want narrow pathways that people will have to squeeze through or can’t fit multiple people
- Going green will save money, the environment and put you ahead of the market down the line
- Windows are extremely expensive so don’t try to save money on them. This is also what people will see from outside the house, so you want to get good quality
- Make sure to get a permit because if something were to happen your homeowner’s insurance won’t cover it without permits pulled.
- Place a high importance on kitchen and bathrooms