(Newswire.net — May 27, 2018) — Renovating a house can make it look more attractive and comfortable. However, this usually does not make the house more valuable. Many professional renovators and real estate experts have admitted that they have made some mistakes along this line in their early renovation projects. Once they have overcapitalized, it becomes very hard to make that money back. The only time it is wise to overcapitalize is if there are no plans of selling the property in the near future.
Here are few things to consider so as effectively manage your renovation cost.
- What are your priorities?
It is very important to establish clear priorities for your renovation project. Firstly, consider what the property will be used for. Will it be sold, owner-occupied, or tenanted?
Secondly, regardless of what the property will be used for, it is better to look for minor projects that add instant value than to take on major projects that add no immediate value. Prioritize those things that friends, neighbors, and potential buyers would first notice as they enter your house. In other words, you should focus mainly on the highly visible areas. After all, they say first impressions matter most. You should probably replace your front door, buy a new welcome mat, and re-do your siding before you start thinking of updating your kitchen or adding a master bedroom suite.
- What type of renovation are you doing?
Generally, there are two types of renovation – cosmetic renovation and structural renovation. Cosmetic renovation includes painting, floor sanding, landscaping e.tc. You should not spend more than 10% of the property value on these. Structural renovation has to do with construction work. About 40% of your property value is the ideal budget for structural renovation. If you spend beyond these recommended amounts, you are probably spending too much for your house renovation.
- Who is handling the job?
Nowadays, there are numerous DIY blogs for house renovation on the internet. YouTube also has myriads of videos you could watch. Many trending home-beautifying magazines are also available for grabs. The problem with DIY renovation is that you would be doing a job you are not certified to handle, and you may end up breaching building code requirements. If this happens, you will have to spend more money to get a qualified professional to fix the faults. For example, if you are to do garage door repair near Peoria , you should get an expert on the job. With standard workmanship, you would not have to employ another builder to re-do the work.
- What neighborhood is the property situated?
The general rule of thumb here is not to renovate a property beyond the fair market value of the neighborhood. Home-buyers and renters would definitely pay more for homes that are well improved, but they won’t pay more than the fair market value of the neighborhood.
Before you begin your renovation, you should do comparative market analysis. Consider the recent sale and rental prices of houses in your neighborhood, and let that guide your budget for renovation. You may lose out grossly if you renovate with the sole aim of having the best house in the neighborhood.
Before you start your house renovation, you should ascertain that such renovation is financially sensible. If you thoroughly consider all the points listed above, you would boost the value of your home without spending too much on the renovation. More so, you would easily make your money back and make good profits when you decide to sell.