Some property owners choose to remodel because they plan to live in their houses for many years and want a gorgeous, comfortable space for that way of life.
There are a lot of pros to renovating your home, from enhancing the beauty and safety of your home to elevating its value if you ultimately want to sell it. In some cases, it makes pure financial sense. Mount up land transfer taxes, legal fees, realtor fees, penalties for breaking a mortgage, and miscellaneous moving costs, and this could in fact be cheaper to sink $50K into renovations than to purchase a new property.
Most of all, home improvements can improve the value of a property. For instance, bathroom remodeling can increase the value of your house by between 75 to 100% of what you spent. That means that if you own a $500,000 home and upgrade the bathroom for $25,000, your house would then be worth between $518,750 and $525,000 – getting back most of your renovation costs.
Where to begin?
If you don’t have enough cash to remodel your house from top to bottom, concentrate on the renovations that add the most economic value to your property. Home renovations that produce the highest ROI are kitchens, bathrooms, interior/exterior painting, decluttering, and updating décor.
Some renovation plans have a better return on investment (ROI) as far as resale and property value are involved. To help you decide the most appropriate renovations for your home, I have put together estimates of the ROI you can assume from some home improvement projects. Some of the most fiscally beneficial are:
Kitchen Renovation
Based on the reports from Appraisal Institute of Canada, the average amount house owners should invest in a kitchen renovation is up to 10 to 15% of the total value of their home. But if you’re remodeling the kitchen for your “forever home” and plan on residing for more than five years, you can smartly extend the budget to 15 to 25%.
Logically, let’s say the average amount for a kitchen would be $50,000. However, A $35,000 kitchen remodeling is inexpensive. We’re talking about kitchen appliances, kitchen countertops, a contractor, kitchen cabinetry – all of those things amount extremely fast. It all depends on your finishes.
Bathroom Renovation
The average price to renovate the bathroom factors in changes to the bathtub, shower system, toilet, vanity, bathroom sinks, taps, flooring, tiles, countertops, lighting fixtures, and windows, as well as labor cost. It could also include moving fixtures, plumbing work, electrical work, or breaking down walls to change the design.
As reported by experts, you should budget up to 5% of the value of your home for a bathroom renovation (I.e $20,000+).
Painting Cost
A brand-new coat of paint does a world of good, providing an easy and affordable way to brighten up a room. The cost relies on the overall size of your space, quality of paint, and labor costs $10K+(commonly $1 or $1.50 per square foot).
How to Finance Home Renovations
Not a lot of people have money scattered around for a big home renovation, thus requiring some clever financial planning beforehand. Here are a few sources for financing a project.
Sofi
Sofi is one of the most user-friendly lenders around because everything can be done from the comfort of your home through their website. You can use the project cost estimator to figure out how much you might need to complete your home renovation, and you can learn what your rate will be in just three minutes.
Earnest
They have a distinctive way of evaluating candidates. They weigh the most likely benchmarks, like your credit history and earnings, but they also consider your spending behavior, education, and your career to decide eligibility.
Marcus
Marcus provides an easy application process online, and you can see the rate you qualify for in about five minutes without affecting your credit score. But that’s not the only benefit to Marcus; they also provide competitive rates starting from 6.99% APR and are a good choice if you have exceptional credit.
Avant
Avant has one major advantage over other home renovation lenders: they can often fund your loan the day after you’re accepted if you opt for direct deposit. They also let you check your interest rate without affecting your credit score.
People renovate their homes for a variety of reasons. Some people renovate their houses to increase the value of their property so that they could flip it later, while others do it because they want to change the look and feel of their home. The reason why people renovate is not always clear, but the above information can help you get a rough estimate of the renovation cost.