How to Use Your Home Renovation Budget to Maximize Satisfaction and Property Value
Are you looking for smart ways to spend a home renovation budget? You know, choosing the kinds of projects that will not only leave your house-envy in the dust, but will make future home buyers drool as they clamor to outbid one another? Let's take a look at home renovation projects that will increase your property value, as well as which trends to pass over.
Make Functionality a Priority
While you may want to dive headfirst into installing granite counter tops, you don't want to start with aesthetic changes. Instead, start with what is no longer functioning. Not only will this make you a happier homeowner for the time that you're still in the house, but it will keep your home from scaring off future homebuyers afraid of unknown repair costs.
- Identify nonfunctioning spaces. This could be an entire room that's no longer usable, or just a small part in a room, such as a broken sink.
- Gather quotes. Find out how much these repairs will eat out of your renovation budget. Then you'll know how much you have to work with.
Choose Additional Projects
When you have renovation necessities out of the way, it's time to look at your home's renovation needs in order to please both you and future buyers. By thinking like a house flipper — someone who purchases an out-of-date home and upgrades it with the sole purpose of turning a profit — you'll likely make the most lucrative decisions with your home renovation budget. Things a flipper would consider in order to minimize costs and maximize profits:
- Consult the experts. Remodeling has maintained a database of renovation return on investments based on which area of the country you live. Consult their current cost-versus-value report to see what projects you could do for the biggest return on your money.
- Consider a face lift instead of a gut. Perhaps your kitchen needs a face lift — such as painting cabinets and adding new hardware, doing a fresh paint job or adding a new sink — instead of a full gut. Decide if there are other rooms in your home that could just use a face lift as well.
- Add curb appeal. In the housing market, people generally judge a book by its cover, or rather judge the inside of the house by how it looks on the outside. So leave some money to work on your landscaping, which will ultimately make coming home more pleasurable for you as well.
Price out the jobs that you've come up with based on these ideas and see how much they'll take from your home renovation budget.
Leave a Buffer for the Unexpected
Anyone who watches the latest crop of DIY home improvement shows knows that renovation projects cost more than you think and take more time than you think. Leaving in a buffer means that you can account for the unexpected, as well as anything else that creeps up when the sledgehammers come out.
Now that you've priced out necessary repairs, plus added in other smart projects with high return on investment, make sure you have a buffer left in your budget. How much should you set aside for contingencies? Better Homes & Gardens suggests setting aside 10 to 20 percent of what you want to spend. If what's left over now that you're in this last step is less than 10 to 20 percent, then go through your list by the criteria above and slash a project, or find a cheaper way of completing one.
The great news about taking all the advice above — setting aside a contingency fund, getting quotes and spending smartly — is that in the end you may have some money leftover to add in a few updates just for you. Even better, you won't go into the red.