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There are several reasons why a homeowner would feel inclined to remodel their home. As your family grows or changes, it may become necessary to add rooms or features that improve the functionality of your living space. When the time comes to sell a home, certain renovations could also increase the value of the home and help justify a higher asking price.
If you’ve done any research as to how much it costs to remodel your home, you know it isn’t cheap. To help you plan for the investment, here are a few tips on best practices for budgeting your home improvement project.
Look into which renovations will increase your home’s value
While some renovations (notably your kitchen and bathroom) will sharply increase the value of your home, other renovations will cost more than they bring in returns. If you’re renovating to sell, read this article about which types of renovations are worth it and which ones aren’t .
Get estimates from at least three different contractors
Once you’ve narrowed down your home improvements wish list into necessary works and not-so-necessary ones, get quotes from three different contractors. Have them price out each improvement individually and as one lump price. You may be able to get a discount on labor if you hire the same person to carry out the entire renovation.
Look at your options for home improvement loans
Ideally, you’d be able to save enough money to pay for the entire project in cash; thus avoiding costly interest payments and preventing you from making impulse purchases. However, this isn’t always possible, and at times it becomes necessary to take out a home improvement loan. You may qualify for obtaining a CMHC home improvement loan in Montreal. Keep in mind that this loan is only offered for “essential” works, such as repairs to structural damages, and not for aesthetic changes to your home. Most financial institutions will offer loans and lines of credit to help with other costs.
DIY is harder than it looks, and home improvement projects always end up being more complicated than you think they’ll be. It’s important to leave enough room in your budget for unexpected expenses. Make sure you have a buffer of at least 10$ for smaller projects, and up to 25% for larger ones.
And lastly, be thrifty with your saving to quickly achieve your financial goals
Saving for a home improvement project may seem like a unsurmountable undertaking, but everything is more achievable once broken up into smaller tasks. Break down your monthly spending into components (housing, food, medical, insurance, recreation, etc), and then hack away at the areas that allow for flexibility. Any area of your budget where you can scale back will hasten your eventual home improvement project.