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How to Avoid Losing Money During Home Renovations

September 14, 2016

how-to-avoid-losing-money-during-home-renovations

Think of it as a practical investment. Home renovations transform a house into something more updated and functional that suits the needs of the homeowners. However, not all home renovation projects guarantee a financial return on investment. If they are an aesthetic splurge or an impractical addition that may not be considered a beneficial feature to everyone, you could be spending a lot of money that you won’t necessarily get back.

While you ultimately have to make your house a home and design it in a way that makes you happy, it is important to be aware of certain types of renovations decisions that can leave you losing money. Here are a few examples:

  • Not securing necessary permits. Before you start any work, secure any necessary work permits that may be required by your city based on the type of project you’re doing. The penalties and consequences of not having the proper permits can be huge and can also leave you in a bind when it comes to inspection time if you decide to sell your house.
  • Not having an “emergency” fund beyond your budget. Most renovations come with surprises that you weren’t anticipating. If you don’t have a contingency fund beyond the amount estimated for your initial plans, you can find yourself in a serious bind midway through construction. As they say, hope for the best, but prepare for the worst. Have some monetary cushion to address any unexpected roadblocks.
  • Splurging on additions. Do you really need that home addition? Oftentimes, we want to justify our wants by convincing ourselves they’re needs, and we end up wasting money. When it comes to home renovation, wants are a great personal splurge if you’re looking for an emotional reward, but if you are tight on your budget, focus on the necessary items first, and only add splurges at the end if your budget allows. This is especially applicable to kitchens and bathrooms.
  • Paying full price up front. Whenever you hire workers for your renovation, do not pay them the full amount up front. Installment payments as they complete projects along the way are the best way to approach payment to ensure they stick to the job until the work is completed. If you give them all of the money up front, you risk them not following through, and then you’ve wasted a chunk of your budget without receiving results.

Not considering health and safety. This is a major issue when it comes to renovations. Consider your family before you start any projects. Will they be safe inside your house while the projects are happening? Are there fumes, dust, or air-borne toxins that may affect them? Is the site safe enough for you to visit or for the workers to work? These concerns should be considered a priority, not only for your health and safety, but also to protect yourself against any liability for worker injuries on the job.

Chris George Homes
Oklahoma City Realtor
Let’s get in touch: 405.843.8188

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