If you’re a homeowner, there will come a time when you will want to refresh your home. Sometimes a few new throw pillows and a fresh coat of paint will do. In other instances, you might be considering big changes, like a remodel or renovation.
The dollars can add up in either situation, but here are a few key things to consider as you decide how to update your home.
What’s the difference between a remodel and a renovation?
A renovation means you’re updating an existing structure with cosmetic changes, whereas a remodel involves changing the structure through demolition and construction. For example, if you renovate your kitchen, you might replace your cabinetry and put in new tile, countertops and hardware. If you remodel the kitchen, you might be adding on square footage, replumbing to move appliances around and transforming the space entirely.
Is a remodel more complicated?
In a remodel, you’ll likely need to factor in additional costs like how an expansion can impact roofing, wiring, HVAC and your home’s current support structures. In the case of room additions, you’ll also need to work with the city to ensure you are complying with building codes and getting the appropriate permits. Generally, remodels are more complicated.
How do I decide?
Either scenario can be expensive, so you’ll want to budget carefully and plan accordingly. Ask yourself questions about why you are considering the change. Do you need more rooms to accommodate a growing family? Have you grown tired of an outdated kitchen or bathroom? How long do you plan to stay in the home? As you start to crunch the numbers, do some homework and consider if the remodel or renovation will add equity to your home. Perhaps the investment will pay for itself in the future when you sell the home, or maybe the changes you are making are so custom and unique that no one else will deem them valuable. You’ll also want to factor in the neighborhood you live in, and if the changes you make fit into the community.
A well-planned and executed renovation or remodel can add up to 10 percent to the value of your home, especially if you hold onto the property for five or more years, so it can be a worthy investment.
Like any big expense, do your homework, hire licensed professionals to do the work and budget appropriately so you can start and finish the job. Additionally, consider a home equity loan to finance the project.
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