The Million Dollar Question: How Much Do You Really Need Saved For Your Home Renovation?
/Homeownership is a money minefield waiting to happen. Not only do you have to worry about saving down payments and getting a mortgage, but you also need to think about keeping money in the bank to make that house feel like your home. Talk about financial pressure!
In fact, it’s no exaggeration to say that the entire home process is the most extreme financial undertaking that many of us embark on in our lives. Luckily, there’s plenty of info out there about the down payment/mortgage side of things. What fewer people will tell you is how much money to save for improvements after the big event.
This can be a tricky topic as it largely depends on the condition of the property you’re buying. Still, considering that you probably just parted with the largest amount of cash you’ve ever spent, there’s no room for guesswork here. Instead, you should at least take the following steps to arrive at a more reliable ballpark figure.
As me and Nick prepare for our real estate investment journey, we are researching the costs of buying a turnkey property or buying a property that needs renovations.
Consult professionals ahead of time
Often, we buy houses with only a rough idea of the work they might need down the line. Sadly, though, underestimations here are a budgeting nightmare, and are the reason you should always consult professionals before buying. Real estate agents should be more than happy to accommodate this, and it’s your best chance at understanding how much you'll spend in advance. This then gives you time to save and even provides an opportunity to knock the house price down a little if unavoidable work is about to set you back significantly.
Don’t forget regulations
While most of us focus on saving enough to pay for work upfront, it’s also vital to consider regulations/permits when planning budgets. Specifics here are location-dependent, so doing your own research into ‘what happens if I building with a permit and how much will it cost?’ should always be a priority. And, again, you should take care of this before committing to a house that will never be within budget all things considered. Luckily, those professionals you’ve already spoken with should know how to navigate these complicated areas.
Consider the cleanup
Many of us also forget the added costs of clean up after renovation works finish. A reputable company will always remove things like rubble, dust, etc. but this is just the tip of the iceberg for many project finishes. You may also find that you need to invest in new carpets, redecorate, or even redo your skirting boards depending on the undertaking in question. These are small costs compared with work itself but, you can bet they’ll still be unwanted additions if you forget to budget and save for them from the outset!
While home renovation prices differ, one variable that always remains the same is that they’re almost exclusively more expensive than we expect. Follow these steps and you can put yourself in a better position to be prepared for anything that comes your way.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by tens of thousands of readers in over forty countries with the same dream of achieving financial freedom without living frugally.
