How to Avoid Overcapitalising on Your Home Renovations
Renovating your home can be a fun and exciting process, but it is very easy to overspend when you are shopping around for new items.
Many people don’t realize their mistake until they want to sell and they are not able to recoup the money that they have spent.
To avoid overcapitalizing on a house, it might be worth your while to determine what the average selling price of homes in the neighborhood is and then set a renovating budget from there.
Many fail to do this and here are 5 reasons why it is so easy to fall into this trap:
No.1 – Taking the DIY route
Some things you can do on your own, but renovations is definitely not one of them – not unless you are super confident in your own craftsmanship.
Many people who take it upon themselves to complete a renovation project often end up with shoddy work and budget overruns.
It is often more cost effective and less of a headache to pay a qualified contractor to do the work for you instead of hiring someone to fix your mistakes.
Furthermore, home buyers can generally spot a DIY job a mile away and they will be reluctant to purchase a house with a shoddy renovation job.
No.2 – Choosing an unqualified builder to do the work
The horror stories are all over: we all know someone who has been conned by a builder. The choice of builder is of utmost importance because this can determine the success of the renovation project.
Ideally, your perfect builder understands your needs and envisions your plans exactly as you do. It is vital that you work with a professional builder who is qualified and who has an excellent track record.
Take your time and shop around for quotes. Ask for references before giving the final go ahead.
No.3 – Underestimating the costs involved
Whether you decide to redo your kitchen or your bathroom, it is going to cost you some money.
One of the biggest mistakes homeowners tend to make is to underestimate the costs involved when redecorating.
Everything needs to be calculated accordingly and this does not only include the materials that you will use for the renovation.
You also have to factor in the professional fees of architects, the cost of drawing up new plans, contractor costs as well as the new items that you are going to have installed like fixtures.
No.4 – Not sticking to the budget
Anyone who undertakes a renovation must create a realistic budget and stick to it.
It is very easy to get carried away in the excitement and pay more than you originally planned. Don’t be swayed into thinking that spending more on an odd fixture or tiles will make a difference.
Every cent counts during renovation work.
You will be amazed at how quick those little extras add up at the end and before you know it you would have overspent thousands on things that you could have gotten for much cheaper.
No.5 – Investing in the wrong things
The general rule of thumb when it comes to renovations is to not spend more than the quarter value of your home.
Keep in mind: not every improvement or upgrade that you make is necessarily going to boost the value of your home!
For example, swimming pools don’t often enhance the value if you consider the amount that you spend on installing and maintaining it. Whereas in a lot of instances, upgrading your garden with minimal improvements will enhance the value of your home a lot more than adding an expensive (and often unnecessary) addition like a swimming pool.
