Once you buy a home, is it really worth it to sell it and buy a whole new home? Why not just renovate the home you have? This appears to be the logic currently coursing through the minds of many homeowners.
A new survey by GOBankingRates found that many people dished out a good amount of dough in the past year on home renovations. When asked, “How much did you spend on home renovations in the last year?” 8% of respondents said they spent less than $500; 16% said they spent between $500 and $2,000; almost 13% said they spent between $2,001 and $4,000; 13% said they spent between $4,001 and $7,000; almost 9% said they spent between $7,001 and $10,000 and almost 6% said they spend more than $10,000.
What is driving people to spend on home renovations instead of buying new homes? Additionally, if you’re one of the many folks embarking on home renovations, how can you go about it affordably?
Super High Interest Rates
Perhaps the biggest reason why so many people are choosing to stay put and renovate their current homes is the onset of sky-high interest rates.
“The increase in interest rates from an average low of 3% to around 6% has resulted in a median rise of 49% in mortgage costs,” said Jeff Childs, a licensed realtor in Chicago and the owner of wepayucashforhouses.com. “For example, potential homebuyers with a monthly mortgage budget of $2,500 could only afford a home worth up to $399,750, compared to $517,500 at the end of 2021.”
Though cost consideration is likely the most influential factor in why people are choosing to renovate over purchase homes anew, there are other contributors to consider, including emotional attachment.
“Many homeowners develop a deep emotional attachment to their homes,” said Joshua Haley, founder of Moving Astute. “These spaces hold memories and sentimental value, making [residents] reluctant to leave. Renovating allows them to retain the familiarity and cherished experiences associated with their current home, while still achieving the desired updates or improvements.”
Another reason for people opting to renovate their homes is the current limited availability of homes on the market.
“In competitive real estate markets, finding a suitable property that meets all the desired criteria can be challenging,” said Denis Smykalov of Wolsen Real Estate. “Homeowners may opt for renovations to transform their current homes into their dream spaces rather than settling for less-than-ideal options.”
Location also plays a significant role in the decision-making process around whether to move or renovate.
“Homeowners might be deeply rooted in a particular neighborhood, with close proximity to schools, work, family or amenities they value,” Haley said. “Renovating allows them to enhance their current property while remaining in their preferred location, avoiding the need to compromise on location when searching for a new home.”
The Opportunity for Customization and Personalization
Home renovations give homeowners the opportunity to tailor their living spaces according to their specific preferences and needs.
“Whether it’s creating an open-concept layout, adding additional rooms, or incorporating energy-efficient features, renovating allows for a personalized touch that might not be readily available in existing properties,” Haley said.
Finally, renovating your home can increase the value of your property and help you build equity.
“By investing in strategic renovations, homeowners can potentially realize a higher return on investment when they eventually decide to sell their homes,” Smykalov said.
How To Approach Home Renovations on a Budget
Now that we understand why homeowners are so driven to renovate instead of sell and buy again, we can investigate some key ways to renovate on a budget. How can you make updates and changes without breaking the bank?
Set a Realistic Budget
For your home renovation project(s), it’s important to set a realistic budget that you can actually abide by.
“Determine how much you’re able to spend, and work backward on what you’re able to renovate,” said Braden Chandler, owner of We Buy Houses Bradenton FL. “It’s better to overestimate the costs than to underestimate and become tight on cash.”
Make a Detailed Plan
“[Renovation] should always start with meticulous planning and prioritization,” said Mike Qiu, the owner of GoodAsSoldHomeBuyers.com. “Develop a comprehensive plan that outlines the most critical areas requiring attention and prioritize them based on urgency and importance. This approach enables the allocation of the budget effectively and avoids unnecessary expenses.”
Research and Compare Prices
As you flesh out your plan for what is needed to best renovate your home on a budget, do your homework.
“Research and compare prices for materials, fixtures and appliances to find the best deals,” Qiu said. “Take advantage of discounts, sales, and alternative options that offer good quality at a lower cost.”
DIY What You (Safely) Can
Some projects, like electrical rewiring or plumbing overhauls, should not be done in a DIY style. But other, smaller projects can be DIY’d.
“Consider taking a DIY approach for tasks you feel confident in handling,” Qiu said. “DIY projects can significantly reduce labor costs, but it’s crucial to realistically assess your skills and seek professional assistance for complex or specialized work.”
Repurpose and Upcycle
Repurposing and recycling existing materials can also save you money when renovating your home.
“Look for opportunities to upcycle furniture, salvage fixtures or reuse building materials, which adds a unique touch to your renovations while reducing costs,” Qiu said.
Be 100% Confident
It’s important to be extremely confident in your choices before they’re implemented, otherwise, you could be paying twice.
“If you aren’t sure about a paint color, flooring choice or cabinet look, don’t move forward,” Chandler said. “This is your renovation and you should be confident and happy with the end result. Deciding after the fact that the wall color isn’t quite your taste means either paying the painter twice or double the work for yourself if you decided to go the DIY route. We had a project once where an entire wall was bricked and the homeowner decided they didn’t like the pattern so we had to tear it all out and start over. Needless to say, this cost the homeowner several thousand dollars and if they had known ahead of time what they wanted, it would’ve been done right the first time.”
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