Saving Cash on Your Next Renovation Project
February 21, 2022
Home renovations can give you up to 70% return on investment (ROI). However, it can be difficult to recoup this much cash at present due to the rising cost of completing renovations. In the past year, renovation costs have gone up by between 15 and 20% and they’re expected to rise further this year. But there are ways to keep your renovation costs down so you can make as much back as possible.
Don’t Wait for an Emergency
In 2021, the number of emergency repairs that were carried out went up by more than 40%. You might think you’re saving cash by delaying having work done on your property, but this isn’t the case. When an emergency happens, you’re less likely to compare prices, get multiple quotes, or weigh up your options. You’re also more likely to make a hasty decision, meaning you’ll pay more than you intended. The best thing you can do is assess all the work that needs doing in your home and prioritize the jobs which are the most important. For example, repairing your roof is essential whereas installing a new bathroom suite isn’t. This way, an emergency situation, such as a flood, is less likely to occur.
Avoid Borrowing Cash
This is generally considered a smart way to pay for renovations.
31% of Americans say they pay for home renovations with a credit card. One study found that 11% would take out a loan. These are good ways to get instant access to money to complete your home renovations, but they will cost you more in the long run. Instead, you should consider other ways you can finance your home project. A refinance calculator can be used to cut your current monthly mortgage repayment, as well as lower the interest rate you pay. This will give you access to more cash each month to cover the cost of home renovations. Another option is to cash-out refinance which means you receive a lump sum of the cash tied up in your home so you can improve your property as you wish.
Start Work ASAP
In November 2021, it was reported that the cost of building materials had increased by 12.2% in just a year. It looks like prices will continue to increase throughout 2022, with experts predicting that lumber could go up by almost $500 per board foot. To avoid these price increases, it’s wise to start work on your home renovations as soon as possible as this will keep prices down as much as possible for you. It’s important to note that the price you agree with a contractor today may not be the final price as materials are creeping up every month. So, the sooner you get the ball rolling, the better off you’ll be.
Homeowners are having to pay out more and more cash on their property’s renovations and this is putting their ROI at risk. The good news is that there are ways to reduce the amount you pay for your next home project and you just have to think outside the box.