5 Questions to Ask Before Doing a Major Home Renovation
Renovations can be great. They can give you more living space without having to move out of your neighborhood. They can make a room more functional. And they can make a house a home. Before you get started on yours, there are a couple of things you should consider.
- Will it add value? The goal of any home renovation is to make you house a better place for you to live. But your house is also an investment, so you’re going to want to make sure your home improvement can add value if you need to sell or use the equity in your home.
- DIY or contractor? Be honest. How good are you construction skills? And how much time do you have to spend on the project? You don’t want to end up with a renovation that’s a safety hazard--or one that’s going to take years. Make sure you know when to DIY and when to hire a contractor.
- How will I pay for it? Do you have enough cash saved or will you have to finance the renovation? You could use a credit card, but we suggest looking into a home equity line of credit (HELOC). If you have equity built up in your home, you can take out a loan for the same amount--usually with a fairly low interest rate.
- How will you use your house in the meantime? Renovations usually take longer than you think and the space you’re working on is probably going to be unusable in the meantime. So you need to have a backup plan. It might be washing your dishes in the bathtub since the kitchen’s inaccessible, or setting up a makeshift bedroom in the living room while your master suite gets redone.
- Is it insurable? Once the renovation is done, you still need to worry about the homeowners insurance. If you hired a reputable, licensed contractor and gotten all the right permits, chances are you’ll have no problem insuring your new space. But if you cut corners or did the work yourself, your insurance company might not want to take the risk.