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.

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