Here are the four worst reasons to renovate your home.
Unfortunately, some people renovate their homes for all the wrong reasons. If you make the same mistake, it can damage your finances and leave you facing a lot of regrets—you spent money to make upgrades that don’t improve your life enough to be worthwhile. Here are the four worst reasons to renovate your home:
1. To keep up with the Joneses. If you choose to renovate your home, you should do so because the improvements will allow you to enjoy your home more. You’re much more likely to love your renovations if you make them because of a deep-seated desire to make the home your own. If you make upgrades just because your neighbor upgraded their home or you want to impress your friends, that’s not likely to pay off for you in the end. You’ll likely not get enough enjoyment from your renovations to make them worth your while. On top of that, the Joneses will eventually make even bigger updates, and you’ll have to start a new project all over again.
2. You think you’ll get your money back when you sell. Home renovations can improve your home’s value under the right circumstances and if they’re done in the right way. They can also make it easier to find a buyer, but keep in mind that you’ll rarely get a 100% return on your investment when renovating your home. If you believe you’ll get back everything you spend, you’ll end up disappointed, which can be a big problem if you borrow more than you can pay back. Think carefully before deciding to refinance home renovations if you make upgrades using a second mortgage or home equity loan. You may end up draining so much equity in your home that it becomes hard to sell for enough to pay back your entire loan balance.
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 tempted to add a playroom just to have space for everything. However, your toddler will grow up faster than you can imagine, which means you could spend a lot of money for an empty room that doesn’t get used. Rather than spend a lot on a home remodel to solve a short-term problem, it’s better to see whether you can repurpose the space you already have. For instance, you probably won’t have a lot of formal, sit-down family meals when your kids are young, so think about using your dining room as a temporary playroom. Of course, your short-term needs may be different, 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, and if you’re one of them, you may be running out of space for all of it. Therefore, you also may be tempted to add space to your house. This is often a bad idea, though, because you’ll probably increase your property taxes (on top of the renovation costs to pay for) and have more space to heat and cool. Rather than remodeling just to make room for extra stuff, remember that perhaps a good decluttering is in order.
The bottom line is that home upgrades can be expensive and time-consuming. If you’re doing them for the wrong reasons, they’re unlikely to be worth the time and hassle. Think about how your life will really improve before you call a contractor to get a project underway.
If and when you’re ready to discuss the best way to renovate your home and/or get it ready for the market, give me a call. My team and I have helped hundreds of sellers just like you maximize their home sales. I look forward to hearing from you.
