Planning for Renovation

Purchasing a home may be the largest and most probable financial risk an individual or group can take. In addition to requiring a substantial down payment, owning a home requires a stable income for mortgage payments as well as for repairs or upgrades. Such an investment often serves as a source of equity, but poor decisions can cause it to become a financial nightmare. Acquiring a $150,000 dollar credit to improve a real estate property does not guarantee a solid return on the investment without judicious strategizing and execution.

Prior to executing any renovations, I would create a detailed budget worksheet with leeway to prepare for unexpected costs. Throughout the renovation project, I would keep all receipts and update the worksheet regularly. While it is important to adhere strictly to the budget plan, the worksheet should also be somewhat dynamic, so that any deviations can be incorporated into the budget and dealt with rather than being viewed as a reason to disregard the plan.

Before considering the aesthetics of the property, I would order a thorough inspection. Buyers may be attracted to a home for its visual pleasantry, but may choose to terminate before closing if there are major health or safety issues with the home, such as mold growth and hazardous electrical wiring. Further, while creativity can lend itself to prudence with regard to the looks of the property, structural repairs often have large and mainly fixed price tags. In order to make sound and economical decisions, I would order multiple inspections to look for convergence in the reports and I would request estimates from many businesses if repairs will be contracted out.

Once the structural integrity of the home is confirmed or established,...

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...s, as well as tidying up landscaping and planting flowers and small bushes, can revive the exterior of a home and enhance its curb appeal. Any extra money in the budget can be used to add magnetic touches, such as a covered patio or outdoor kitchen. As with the interior of the home, it is important to research other homes in the area and to speak with local realtors to find an addition that is most likely to generate a return.

Owning a home is a gratifying experience; as you reap the benefits of shelter, your mortgage payments and other personal investments in the home build equity, at least in a healthy market. The objective value of those investments depends on the housing market as well as the quality of the investment decisions. Careful planning, prioritizing, and ingenuity can promise a sound return on the investments one makes in a real estate property.