Thursday, 24 July 2014

When not to Remodel Part 2

  1. Who are you keeping up with? Does your home really need a remodel? Or are you planning on one because people you know are doing it? Look at your home objectively – not in comparison with those of other people. You are going to live in the home, not others. It has to be the way you want it. If changes are to be made to it, these should be because they are what you want, not because it is what others are doing.
  2. Increasing your equity is an important part of home remodeling. Are the changes you plan purely cosmetic? Or will they add to your home’s value? Even if you have no plans at present to sell your home, things may change in the future. Moving and buying a new home is a huge expense. If you will not be able to recoup the money you have invested in the remodeling when you sell, how will you be placed financially? If you are sure that the cost of home remodeling will not have a negative impact on your financial future, that’s fine. But if not, you need to think about the necessity of the project and if it is really needed, how much you can afford to spend and what the expected returns on the investment will be. Of course, a home is not purely an asset that needs to be built on. It is a part of your life and must offer you comfort and security. You have to spend on these to live well. And that means spending on making the home attractive. But, it is important to know and appreciate the implications of the money you will be spending.
  3. Remodeling is as much about the future as it is the present. You are changing your home so that it will continue to be the place you are happy to live in. But, what about your income in the future? We live in a world of uncertainties and it is not possible to be sure about your income down the road. Are there any clouds over your employment? Are any of your investments likely to suffer setbacks in the future? There are no guarantees in life, but you should be reasonably sure that the cost of the remodeling is something that you will be able to absorb without the possibility of undue financial hardship in the years to come. The issue of building equity by increasing the home’s value has already been mentioned. But that does not mean that selling your home should be part of a financial survival package. You should sell it because you want to or because of other non-financial reasons. Selling a home because the cost of remodeling it has placed you in a situation where you have no choice is not something to look forward to.
For every reason not to remodel a home there are many more in favor of it. As long as you have understood what you are getting into, there is no reason not to do it. Planning a home remodel can be a huge amount of fun. And, living in a dream home will be a joy for years. So, if home remodeling is what you have your heart set on, go ahead and get started. Just be sure that you are doing it for the right reasons.

Saturday, 12 July 2014

When not to Remodel Part 1

The temptation to remodel your home is great. TV, internet, magazines and “lifestyles of the rich and famous” all conspire to encourage us to continually look at ways to improve our homes. There is nothing wrong with this – a home is the biggest investment and improving, upgrading and enhancing its value are always good things to do.  But it is important to be sure you are doing it for the right reasons. Remodeling just because it is “the” thing to do is a mistake. You could end up with a home that is better than when you started. But it will probably not be the best you could have done. At worst, the end result could be a home that you are not happy with.

So what are the reasons for not remodeling? Ask yourself these questions and answer them as honestly as you can. The answers you give will allow you to see if your remodeling is being done for the right reasons.
  • Remodeling or a trip to Paris? You may have put the money aside but what do you really want to use it for? What will bring you more pleasure – not just immediately but in the future? The new home will be a source of happiness for years. But so will be the fun of a trip to a long dreamed destination and the memories that will last for a lifetime. Or a swimming pool. Which is really important for you? Which is the one that you need to do now and which one can be done later on? Do you need to remodel now or is it just that you have been saving up for it for year and it has become a focus of your life? Does the home really need remodeling? Spending on remodeling may be the more practical way of spending your money. But is being practical more important than living a dream? Think carefully about this one.
  • Have you thought the problems through? Magazines and TV shows start with the ‘before’ and jump to the ‘after.’ The hassles and discomfort that are part of the middle are often overlooked or hidden. Even with the best of contractors and a large budget, a home remodeling project can disrupt lives. Is this the right time to go in for it? Do the kids have exams coming up? Are there big family events that will be happening at the same time? Is it possible that work pressure will be high during the period when the remodeling will be on? Are there elderly family members or children who will need special care during the remodeling process? Check with everyone who will be involved in the remodeling and be sure that the disruption to lives will be within control. If not, consider postponing the project for a more suitable time
  • Can you really afford this? Most ‘remodeling on a budget’ TV shows, websites and magazine articles focus on theoretical remodeling projects where the real world issues do not intrude. Even those that depict real remodeling jobs tend to gloss over the compromises that budgetary constraints can lead to. Are you going to be dipping too much into you savings? How much will you have to cut back on your current lifestyle and for how long? What will be the consequences? Will you be happier with a more expensive remodel even if it means living in the present conditions for a few more years? Impatience is a natural emotion and can be a good thing. Just do not let it rob you of the home you really want.