If you’ve been following our three-part blog series, “Buying a Fixer-Upper Home,” then you know that we introduced you to the lucrative $300 billion renovation industry and we helped you fall in love with your perfect fixer-upper home. Now that the honeymoon phase of finding your perfect fixer-upper home has passed, we’ll help you live happily ever after by sharing some best practices for effectively managing your renovations.
Couples Counseling – Planting Roots, or Flipping for Loot?
Before you even begin your renovations, you have to know where this fixer-upper relationship is going. Do you plan on settling into your fixer-upper and planting roots for long-term home ownership? Or are you “fixin’ to flip” the house, as we might say in the South, to rent or sell? Long- and short-term homeownership plans will affect your budgeting and design decisions, as well as the timing of your projects.
For example, if your fixer-upper is your forever home, you may want to stretch out your renovations over a longer period of time and spend more money now on details like, higher-end finish-outs, luxury appliances, solid-wood doors and nail-down wood floors. If your fixer-upper home is an investment that you plan on flipping for resale or rent, you might profit better by choosing mid-grade appliances, laminate flooring and moderately-priced fixtures, all of which may help you stretch your dollars to cover as many of the renovations as possible.
We’re Dating! Who’s Paying?
Now that your short- and long-term homeownership plans are set, you’ve got to face one of your biggest renovation challenges – setting and managing realistic budget expectations. We suggest:
- Bring In The Professionals – Contractors and designers are key to helping you determine the best approach to your renovations, timelines, prioritizations and costs, especially if you are making substantial structural and property changes. Your contractor and architect/designer should work together cohesively to ensure new design elements are possible, and to avoid unplanned budget-buster scenarios, like neglecting to factor in electrical costs associated with installing your dream kitchen island.
- Determine Cost Vs. Value – As you review your wish list of fixer-upper projects with your construction and design team, you may have tough decisions to make in order to stay on budget, like choosing between marble or granite countertops, selecting hand-scraped or engineered wood flooring, or tearing down walls and old doorways. To help prioritize your projects, check out Remodeling Magazine’s Cost Vs. Value tool to evaluate each project’s resale value.
Blending Styles – Fixin’ Your Fixer Upper
Do you know your home style? Rustic modern? Traditional? Farmhouse? Contemporary? Whatever style you envision for your fixer-upper home, don’t neglect to consider the home’s original character. For example, a very contemporary palate is not likely to blend well with a historic Victorian home. If this is the case, you would likely be looking at a complete teardown.
In addition, your architect/designer and general contractor might have their own ideas and trade styles that they may prefer for your renovations. Remember that with any relationship, communication is key! Make sure that all of you are envisioning the same outcome before the hammers even come out.
If you find yourself struggling to make some design and construction decisions, seek the advice of those homeowners that are celebrating years of successful renovations. Check out Houzz.com to see thousands of examples of different home renovations and fixer-upper ideas. You can also use Houzz.com to locate general contractors and architects in your area.
Happily Ever After
Of course while we can’t predict the future of your fixer-upper, we do know a couple of great rules of thumb to live by when building your happily ever after. Take heed:
- Get Your Permits – Obtaining permits may mean added costs, an inconvenience and possible remodeling delays for homebuyers. But neglecting to get permits can lead to even more costs with city fines, as well as the added inconvenience and delays from having the city completely halt your renovations until permits are in place. So get your permits before renovating begins.
- Have a Rainy Day Fund – Because each fixer-upper home comes with its own unique history, it is rare for homebuyers to complete a renovation without unplanned expenses popping up. In preparation for unexpected renovation costs, set aside a rainy day fund to help get things back on track. If you still have that extra money at the end of your renovations, you can put it toward one of those deferred projects, or use it for more furnishings and décor. Also, many renovation-specific mortgages actually require that a pool of money is set aside for unexpected costs.
PrimeLending is excited for you to take on a fixer-upper. We hope this blog series has offered you the best tips for managing a successful home renovation. And remember, you can always seek the advice of your PrimeLending home loan expert regarding any loan concerns. We wish you love, laughter and happily ever after … in your perfect fixer-upper!
from the PrimeLending blog, by Mandy Jordan