Provided by Whitlock Wealth
With the real estate market as competitive as it is in various U.S. cities, more people are opting to stay in their current homes. This decision frequently comes with the desire to take on additional house projects, which often impact your financial situation. If you are considering upgrades and remodels, read on for several considerations on how to prioritize your housing projects.
If you plan to move within the next few years:
- Be cautious about how much money you sink into a renovation or upgrades. Since renovations require an investment, ideally, you’d like to recoup what you put into the project when it comes time to sell the house. This is no sure bet, regardless of the undertaking. Many factors affect a home’s value, including the state of the market where you live.
- Ask professionals what upgrades make a difference in your area. It’s relatively easy to refresh a home with new paint, but if the color is off-putting to potential buyers your efforts may be futile. Before starting any projects, consult a trusted realtor or appraiser to find out what projects may help, or at least not hurt, your ability to sell your home.
- Fix any problem areas. Do you have a tub that constantly leaks? Or a yard that needs a retaining wall? Addressing persistent issues avoids more costly fixes, should the problem worsen over time. And, doing so can help avoid a delay in the home closing process when you decide to sell. The last thing you want to do as you’re getting ready to move is complete a last-minute project that the buyer asks you to take care of as part of the contract.
If you have no plans to move in the interim yet likely will one day:
- Tackle items that will improve your lifestyle while also potentially adding to the home’s value. Finishing a basement, hiring a professional landscaper, redesigning a kitchen or adding another bedroom are examples of projects that could increase your home’s resale value. Yet importantly they also allow you to better use the space for the lifestyle you want – whether it’s adding a room to accommodate a new baby or making your layout better for entertaining. Keep in mind the first bullet above though: that you may not recoup the total cost of the project at the time of sale.
- Upgrade the items that matter most to you. Many people will put a lot into home improvements in the months before they plan to sell in order to make a house more marketable. Yet if there are improvements that will upgrade your own enjoyment of the home in the years before you intend to sell, consider tackling those projects first. After all, this is your home and there’s no reason you shouldn’t benefit from the improvements as well.
If you plan to stay in your home:
- Decide whether to tackle renovations all at once or over time. Contractors often offer modest cost savings to address multiple upgrades because they can be efficient with various vendors or order materials in bulk, for example, if you chose to redo several bathrooms at once. Yet doing so often requires a larger financial commitment up front and presents more ways to uncover additional expenses. Decide carefully how and when to prioritize projects and consider setting aside money specifically for your to do list.
- If you are growing older and hope to live in your house for years to come, you may want to focus on adapting your home to be more accessible. Upgrades may include adding wheelchair-friendly doorways and floors or remodeling to make enough living space on one level.
No matter the size of your renovation wish list or how long you intend to stay in your home, house projects have financial implications. Consult with a financial advisor in your area for guidance on how home improvement projects fit with your budget and financial goals.
Bennett C. Whitlock III, CRPC® is a Private Wealth Advisor and CEO with Whitlock Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, Inc. in Downtown Manassas. He specializes in fee-based financial planning and asset management strategies and has been in practice for 25 years. Contact him at 877.WHIITLOCK, email@example.com or whitlockwealth.com.
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