Here are four major reasons to reconsider renovating your home.
Don’t jump into a renovation project you’ll regret.
Renovating your home can make your space more livable. It can also sometimes be a smart move – especially if you make the right choices about how to finance home improvements.
Unfortunately, sometimes people renovate for all the wrong reasons. This can be damaging to your personal finances. It can also leave you facing lots of regrets when you’ve spent money to make home upgrades that don’t actually improve your life enough to be worthwhile.
Keep reading to make sure you avoid renovating your home for any of these four terrible reasons.
1. To keep up with the Joneses
If you make the choice to renovate your home, you should do it because the improvements will allow you to enjoy your home more. You’re much more likely to end up loving your renovation if you do it because of a deep-seated desire to make the house your own.
But if you’re doing home upgrades because your neighbors just renovated or because you want to impress your friends or have something to show off on social media, that’s not likely to pay off for you in the end.
You likely will not get enough enjoyment from the renovation to make it worthwhile. You’ll also end up being trapped in a constant cycle where you always need to improve something.
After all, eventually the Joneses will do an even bigger update, or the likes and comments on your current renovation will dry up, and you’ll need to start a new project again and again.
2. You think you’ll get the money back when you sell
Home renovations can improve the value of your home in the right circumstances, and they can sometimes make it easier to find a buyer. But, you will almost never get a 100% return on your investment when you renovate your home.
If you believe you’ll get back everything you spent, you’re likely to be disappointed. And this can be a big problem if you end up borrowing more than you can pay back.
Think carefully before deciding to finance home renovations. If you make upgrades using a second mortgage or home equity loan, for example, you may end up draining so much equity in your house that it becomes hard to sell for enough to pay off your entire loan balances.
3. You have a short-term need
Sometimes, when you’re in a certain phase of your life, you can lose sight of the big picture and imagine you’ll be stuck in that phase forever.
For example, if you have a toddler who has tons of toys everywhere, you may feel prompted to put in a playroom just to find space for it all. Of course, your toddler will grow up faster than you can imagine. That could mean you’ll have spent a lot of money for an empty room that doesn’t get used.
Rather than spending a lot on a home remodel to address a short-term problem, it’s better to see if you can temporarily repurpose the space you already have. For example, you probably won’t have lots of sit-down meals in a formal dining room when your kids are young, so think about using that space as a playroom temporarily.
Of course, your short-term need may be a different one. But it rarely makes sense to make permanent changes to your home just to deal with a temporary problem.
4. You can’t declutter
Many people amass a lot of stuff. If you’re one of them and you’re running out of room for all your possessions, you may be tempted to want to add space on to your house.
This is often a bad idea because you’ll probably increase your property taxes, you’ll have the renovation costs to pay for, and you’ll have more space to heat and cool. Rather than remodeling just to make room for extra stuff, consider whether decluttering is in order.
The bottom line is, a home upgrade can be expensive and time consuming. If you’re doing it for the wrong reasons, it’s unlikely to be worth the money or hassle – so think about whether your life will really improve before you make a call to a contractor to get a project underway.
A historic opportunity to potentially save thousands on your mortgage
Chances are, interest rates won’t stay put at multi-decade lows for much longer. That’s why taking action today is crucial, give me a call at (703) 328-3434 whether you’re wanting to refinance and cut your mortgage payment or you’re ready to pull the trigger on a new home purchase in the Northern Virginia / D.C. Metro market.