There are a lot of reasons why people chose to make home improvements. Maybe you’re preparing to sell your home, or you just want it to be a better fit. Maybe you’re tired of looking at the same house year after year and just want a change. Of course, many home improvements come with a hefty price tag. Smart homeowners will find ways to make their home improvements financially sound.
Focus on Value
Improving the value of a home is one of the top reasons for doing home improvement projects, especially when preparing to sell a home. If you want to get the best return on your investment, you need to choose projects that increase home values over those that have a smaller return or could even negatively impact home values. Making high ROI projects a priority pays off when you sell your home. They may not be the most glamorous projects or even the ones you would choose to prioritize, but they’re the more financially sound choice.
One of the most important things you need to do to make your home improvements a financially sound move is to create a solid budget for them and then stick with it. That can be tough because mistakes happen and unexpected expenses often crop up. You should add 20% to your renovation budget to account for mistakes and unexpected expenses. Beyond that, have your mind made up and stick with your plan. Making changes like choosing different materials after they’ve already been bought is a good way to overextend your budget.
Consider Different Financing Options
The best way to finance a home improvement project is to use cash. Home improvement projects tend to cost thousands, if not tens of thousands of dollars, and the median bank account balance in 2019 was just over $5,000. Given that information, it’s reasonable to expect that you would need to find other financing options. Whether you choose to open a HELOC, use a credit card, apply for grants, or pursue a different option will depend on your financial situation. Look at all of your options before making your choice so you can make the most financially sound decision for you.
Home improvements cost money, no matter how you look at them. What the project can do for your home value, how much you spend, and where the money comes from, however, can all impact how financially sound the project is. Whether you’re trying to improve the value of your home or you’re just ready for a change, take the time to make sure your home improvement project is a smart investment for your home.
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