Most homeowners start toying with the idea of renovating at some point. An extra bedroom seems like a great idea, an entertainment area seems essential or a more modern kitchen becomes the ultimate goal.
There are many reasons why a renovation can be a great idea. It can improve the value of your home. It may also make it easier to sell the house one day. But there are also a few reasons why a renovation isn’t always a good idea.
You’ve already renovated recently
It isn’t necessary to renovate that often. No more than every 10 years, at the most. Renovate more often than that and your home will begin to feel disjointed and mismatched. You might also be renovating often for the wrong reasons. Doing so to impress friends and family is never a good idea.
It won’t add sufficient value to your home
If there’s a chance you’ll be selling your home within the next few years, there’s a good chance you might not make your money back. And let’s be honest, how often can you actually see into the future and know when you’ll have to sell. In addition, you could run the risk of overcapitalising. That’s when you spend more on the renovations than the value that they add to your house. A good example of this is adding a swimming pool. Many neighbourhoods have a ceiling value and buyers won’t consider paying more, despite the extensive renovations you’ve made to your home.
There may be hidden costs
Building jobs almost always come with hidden costs. The industry is notorious for projects always going over budget and taking longer than expected. You might think you can afford to pay a certain amount for a renovation but if the project goes over budget, as it most likely will, what will you do?
You can’t afford to renovate
And sometimes, you just can’t afford to renovate. Home renovations are always expensive. You’ll need to carefully consider how you plan to finance the project. You could set a little bit of money aside for a few months or years and wait to start renovating. Or if you simply can’t wait, you could take money out of your bond, apply for a loan or cash in a unit trust investment.
When you won’t benefit
Make sure you’ll actually enjoy the renovations. If you don’t enjoy entertaining at home, a bar area won’t make sense for you. If you haven’t dipped a toe in a swimming pool in 30 years, this won’t add value to your life. Completing a renovation project on the off chance that it will improve your home’s value or chances of selling in the future, likely don’t make sense for you.
After weighing up all the pros and cons of renovations – of which there are many – you’ll need to decide what’s best for you, your family and your home. Remember to never rush into a renovation project, the downside can be too high a price to pay.