Anyone who has lived in the same house for a number of years inevitably gets the reno itch. While a gut job is expensive, home renovations are still an affordable way to upgrade without moving.
“It’s natural that after a certain point, homeowners start to notice the flaws in their homes,” said Farhaneh Haque, director of mortgage advice at TD Canada Trust. “It could be that the layout is no longer practical, the bathrooms are outdated or the exterior needs some curb appeal. Each of these areas can increase the property value of a house while making it more suitable to the homeowner’s needs.”
Before picking up the hammer and hardwood, Haque recommends homebuyers plan for the cost of a home renovation:
• Consider upgrades that save money: Green options, like installing insulated glass windows, may cost more initially, but they can make sense financially in the long-run when future energy bill savings are considered.
• Research and budget for the unexpected: The reality is that a home renovation often costs more than planned. Before starting any work, consult with at more than one contractor to help accurately assess costs of materials and labour. It’s also a good idea to build a buffer into the budget for any unexpected expenses.
• Explore financing options: A home equity line of credit (HELOC) allows homeowners to use the equity they’ve already built in their homes to finance upgrades at a competitive interest rate. Consider using a HELOC to pay different trades people as the work progresses to avoid paying interest on credit that hasn’t been used. With ongoing access to credit, it can be tempting to go overboard, so remember to stick to the budget.