What You'll Learn
- It’s difficult, and rare, to recoup the money you put into remodeling projects
- Before embarking on remodeling projects, ask yourself how long you plan to live in the home
- When hiring a professional, be sure they are licensed and insured
Remodeling your home can be very rewarding, but it can also be expensive, time consuming, and disruptive. Before you dive in, ask yourself how long you plan on living in your home and if it’s an investment in your lifestyle. It’s also important to understand that most home remodeling projects don’t recoup the investment when you sell your home.
Some advice from the experts:
- Remodel for the right reason. "It's smart to do it for your own enjoyment and not count on getting all the renovation costs back at resale," says Pat Vredevoogd Combs, past president of the National Association of Realtors and vice president of Coldwell Banker AJS Schmidt Realty in Grand Rapids, MI.
- Move out of the house for renovations. Contractor and host of HGTV’s Holmes on Homes Mike Holmes says, "A two-story or second-story renovation affects too many parts of the house, so living there is often not a good idea."
- Keep it simple. "When it comes down to budget, the only way to save without doing it wrong is to go with simple finishes," Holmes says. "It's fairly easy to upgrade cosmetics later, if you want."
Tips for Hiring Professional Help
- Do your homework and talk with a financial or other trusted advisor before financing any energy efficient upgrades. Some programs expose you to significant risks when it comes time to sell or refinance your home and include fees, high interest rates and unfavorable repayment terms.
- Talk to friends or check with your local homebuilders association for reliable contractors. Ask for references and check with the Better Business Bureau to see if complaints have been filed.
- Have at least 3 contractors compete for the work. Make sure they provide you with firm estimates. Ask about hourly rates for any extra work that may occur.
- Make sure the contractor is licensed and registered with the state and has personal liability, worker’s compensation, and property damage insurance. Ask for copies to ensure documents are current.
- Make sure that you have a detailed written agreement on the work that will be completed and the agreement allows you at least 3 business days to back out. Before signing, be sure you understand and agree to the terms and how payments will be made.
- Don't pay in advance, and never pay in cash. You may be asked to make progress payments, but hold up to one-third of the contract amount until the work is completed to your satisfaction.
- Keep a written record detailing the progress of the work, payments made, approved changes, and other notes. Your records could help resolve confusion along the way.
Remodeling can be expensive and you shouldn’t count on getting a return on your investment.
Before hiring a contractor, be sure to get competitive bids from at least 3 contractors.
Do your homework before financing any energy efficient upgrades as many programs come with risks.