The following is a guest post by David Bakke, a homeowner who lives in Atlanta, Georgia. He writes about home improvement, money management, and frugal shopping on Money Crashers Personal Finance.
If you are planning to ride out the current state of the housing market, the wait to sell your home may seem excruciating. I have negative equity; I owe more on my home than my home is worth. Although I felt tempted to walk away from my mortgage, I decided to stick it out and stay put.
While I continue to live in the home, I have decided to do some remodeling. When the market recovers, I can bump up the selling price, and in the meantime I get to enjoy my home improvement and remodeling ideas.
A lot of planning and forethought goes into home renovation. Planning can help you stay on budget with finding and finishing the right remodeling projects for your home. Avoid common home renovation mistakes when you begin to make sure your projects stay on track.
Here are some home remodeling tips to get you started:
1. Compare Prices and Shop Around
With the housing market struggling, many qualified contractors need jobs. If you plan on hiring help, shop around to find a good contractor with reasonable prices. Many contractors can negotiate prices, especially if you hire an individual or company to do several projects in your home. While cost is an important factor, learning about the contractor’s work history, looking at photos of completed projects, and talking to past customers can also help you choose.
2. Consider the Do-It-Yourself Option
Depending on the complexity of the project, you may be able to complete the project yourself. This can result in a huge cost savings. I recently installed laminate hardwood flooring in two of my bedrooms with very little experience installing floors. I made a few minor mistakes, but overall my floors turned out beautifully.
On the other hand, you need to know your limitations. Taking on a project beyond your realm of expertise can end up costing you a bundle in the end; spending money to correct a mistake can quickly bust your home renovation budget.
3. Resist High-End Luxuries
If I had a million dollars, I might install granite countertops for the kitchen, wire-hung track lighting in the living room, real hardwood floors in the bedrooms, crown molding in every room of the house, and vessel sinks in the bathrooms. But I’m not a millionaire, so I know spending money on these projects would be unrealistic.
Keep your upgrades within your budget, and don’t get too extravagant. If you really want a special feature in your home, choose one item or room and spend a bit more money on the one remodeling project. Otherwise, spend your money where it matters: on quality contractors and well-made appliances, fixtures, and other products for your home.
4. Don’t Skimp
You do need to spend money on the things that affect your home’s resale value. If you cannot do the job, hire a professional. You only save money on do-it-yourself projects when you correctly execute them. For major projects, such as tearing down interior walls, consider hiring an architect to draw up blueprints, as architects often have specialized training in remodeling.
No matter what project you tackle, try to use products and services of better-than-average quality. Never buy the most expensive paint, molding, or materials, but don’t buy the cheapest ones either. When you work with a professional, compare estimates to get the best prices, but keep an eye on quality too.
5. Don’t Overestimate Your Return on Investment (ROI)
Although improving your home’s resale value may be the primary motivation for a remodeling project, these returns are often never realized. Improving the quality of your home can increase its resale value, but it may have a minimal overall impact on the bottom line.
The ROI for any home remodeling project varies, depending on the need the project fulfills and the quality of the work. Some major projects won’t provide much of a return, but you still have to do them in order to sell your home. For example, replacing the roof has a poor return on investment, but not replacing a worn-out roof can negatively impact your home’s selling price or ability to sell at all.
No matter what happens to the resale value of your home, remodeling projects can make your time in the home more pleasant, as you enjoy the benefits and advantages of the upgrades. That alone can mitigate some of the expenses.
6. Understand the Cost Effectiveness of Going Green
Any sort of green upgrade to your home will certainly make it more energy-efficient. If you expect these savings to pay for the projects, you might be disappointed. You will save some on energy bills, but the short-term savings will likely be negligible. However, these changes benefit the environment, and may make a difference to eco-conscious home buyers when you list your home.
Regardless of the housing market, you can always benefit when you invest some money in home improvement projects. Over time, housing markets recover. By improving the quality and look of your home, you can maximize your home’s resale value without breaking the bank.
What have been your worst home remodeling mistakes? What are your greatest success stories?
Crystal’s Comments: The best remodeling decisions we have made so far have been flooring. The new wood laminate downstairs has been awesome for 4 years now and the new carpet looks great. We had these installed, but we shopped around for the best rates and got two very good deals.