Borrow Carefully

Old home, new dream: Remodel your way to the home of your dreams

Read: 5 minutes

If your DVR is full of "Love it or List it" and you find yourself daydreaming about HGTV knocking at your door, then it's official: you've caught the home renovation bug.

And it's no surprise. Many homeowners are choosing to stay in their homes for the long haul. Instead of selling, they're taking a DIY approach to upgrades that will enhance their quality of life and appeal to potential buyers down the line. In fact, spending on home remodeling has been on the rise for a few years, and it's projected to increase by more than 7 percent in 2018, according to the Harvard University Joint Center for Housing Studies.

But just because you're ready to remodel doesn't mean that it's time to whip out the sledgehammer and paint samples. Before you start, try these six pro tips to make sure your investment makes the most sense for your budget and your goals.

1. Research your options

Moving into a new kitchen is wonderful—what's less enjoyable is dodging around a partially-built wall while you scrounge up the money to finish hanging sheetrock. To avoid spending months looking at a hole in your backyard that might, someday, be a pool, do your research ahead of time.

Find out how much your project will cost, and how much time it's going to take. Budget for all the little incidentals—laying stone for your patio, painting your new front door, hooking up the gas in your newly remodeled kitchen—and budget extra for the little setbacks that will almost inevitably occur. Then, arrange to get the money before you start. That way, you can quickly move on to living in your new home—instead of a construction zone.

2. Explore your money options

Though cash is the best way to pay for home improvements, you may have other options, such as tapping into your home's equity. According to CoreLogic, a data analytics provider, the average US home gained $16,200 in equity between the second quarter of 2017 and the second quarter of 2018. Not surprisingly, a lot of homeowners are taking advantage of their home's rising value with Home Equity Lines of Credit (HELOC).

"A HELOC gives homeowners access to funds, using their hard earned equity to renovate and improve their home throughout the years," explains Ben Trstena, a Chase Home Lending manager.

In addition to improving your home's liveability and increasing its value, HELOCs could even help lower your taxes: if you are considering applying, set up time to speak with a tax advisor about your deductability options.

3. Pretty houses bring all the buyers to the yard

While we don't deny that you have excellent taste, it's important to consider how your preferences match up with market trends. Since real estate professionals place a lot of importance on curb appeal, prioritizing outdoor projects, such as replacing entry doors, windows and siding, could increase the return on your investment.

Remodeling Magazine's 2018 Cost vs. Value report found that exterior projects had an average payback of 76 percent nationally, and interior projects returned just 56 percent.

For example, a new garage door costs about $3,470 on average. However, homeowner who take on this curb-appeal project are expected to return around 98 percent of costs upon resale.

4. Go green to save green

Lowering your home's heating and cooling bills with energy-efficient upgrades will also make your home more comfortable and boost its resale value, especially in regions with extreme hot or cold weather.

Replacing single-pane windows with Energy Star certified windows can cut your heating bill by up to $465 per year, according to the US Department of Energy. It also has a high return on investment: according to the Cost vs. Value report, the project costs an average of $15,955 nationwide and has a payback of 74.3 percent.

5. Start small

We know it's tempting to splurge on major renovation projects such as a deck or kitchen remodels. But major changes like moving plumbing and electrical lines and installing new appliances require professional skills and knowledge—not to mention a lot of labor—to do properly.

So why not keep it simple? Try budget-friendly updates to a bathroom, for example. The simpler the job, the easier it is to tackle. Later, you can build your way up to larger, more expensive, renovations.

6. Don't improve too much

This might seem like an odd consideration, but making your home too nice during a remodel can actually work against you. The term "over-improvement" is used by appraisers to describe home improvements that are larger or costlier than are typical for a neighborhood.

Over-improvement can actually make your home more difficult to sell in the long run. To avoid it, do your research on the value and typical features of homes in your area so you don't price yourself out of the market.

Ultimately, home improvements are about getting the house of your dreams—without having to adapt to a new neighborhood, pay a fortune for a new house, or completely disrupt your life with a major move. The secret is research: find out what you want, how much it will cost, how you'll pay for it, and how it will affect your life if you ever decide to move. Most of all, don't rush: while you may want to speed into your future, keep in mind that taking your time now will ensure that you end up with a home that you'll love for years!


Brenda Richardson is a Chase News contributor. Her work has appeared in the Chicago Tribune and The Washington Post.