You may be lucky enough to stumble across your ideal home. If not, you may find that your current house can be transformed with a little hard work. Before you start knocking out walls and hiring contractors, however, a few things should be considered. Home remodeling requires a clear vision of the end product, interaction with contractors and taking out a loan or refinancing to fund the remodeling.
How Much Home Improvement Can You Take?
A simple home improvement, such as knocking out a wall to convert two rooms into one, won't take much time. More complex renovations, such as adding a second story or completely transforming the kitchen, will take longer, cost more money and disrupt home life during remodeling. Make sure you and your family are willing to live with some inconvenience or even move during extensive home improvement.
Consult Home Improvement Professionals
Work with home remodeling specialists to accomplish your home improvement goals. Hire an architect, contractor or interior designer before starting. These remodeling experts will be able to help you plan your renovations and give you a general idea of costs. They may also spot issues in your plan that you overlooked. (If that wall you're taking down is a supporting wall, it's better you know before swinging the sledgehammer.)
Get bids from several home remodeling contractors, and compare their estimated costs and completion times. Be suspicious of bids that are significantly lower than the others. Low bids may not reflect costs included in the other bids, which may be charged later as the remodel progresses.
Don't Forget Building Permits
Before you begin home improvements, make sure that you have all the necessary building permits. Exactly what you can or cannot build or remodel varies from city to city. You may only be permitted to build during certain hours, and the end results will need to meet local building codes and pass inspection.
Home Improvement Costs and Return Value
The room you are remodeling will determine the average cost of the home improvement project. Updating a kitchen is often the most expensive home remodeling project. Second in price is the bathroom. A mid-range bathroom renovation is expected to cost nearly $10,000 and an upscale job might cost nearly $23,000. On the more positive side, remodeling these rooms will most likely improve the market price of your home.
Some renovations yield a larger return on investment than others, according to the 2010 Cost vs. Value Report by the National Association of Realtors®.
- Deck additions yielded the highest return of 72.8 percent.
- Basement remodels came in second with 70 percent.
- Major kitchen remodels ranked third with 68.7 percent.
- A two-story addition is expected to yield a 65 percent return on investment.
- And a bathroom remodel brings in 64.1 percent.
It’s also important to have a good idea of how long you intend to stay in the home so you can remodel accordingly. If you think you might not stay more than a couple years, perhaps lower- range appliances and fixtures might suffice. If you plan to stay more than ten years, you should realize that by buying a higher quality refrigerator or bathtub, you'll be spreading the cost over more time and it becomes more worthwhile.
Paying for Home Remodeling
There are several ways to pay for home remodeling costs. It’s important to consider how much value the improvements are expected to add to the home and how long they will take to pay back. Some of the financing options available for home remodeling projects include home equity line of credit, cash-out refinancing, home equity loans and other loan options. And of course, cash is always an option. Additionally, there are even some federal government grants for home improvements.
When deciding which home improvement projects to take on, and how much to spend, homeowners should be careful to avoid loan scams. If your contractor is offering financing as part of the deal, take a step back and make sure you’re working with a legitimate professional. Seek out multiple financing estimates for your project, and make sure you understand all aspects of any financing agreement before signing on the dotted line.