You’ll often want to begin making improvements after you buy your home, whether it’s a fixer-upper or basically fine the way it is. Planning is critical for these projects, especially when working on multiple projects at the same time. Remodeling a room has additional considerations that are specific to that particular room. Financing is also an important consideration for home improvement since even modest projects can quickly deplete your savings.
How to plan your home improvement project
New homeowners often make the mistake of simply diving into their home improvements projects without developing a solid plan. Ensure that you understand the details of your project, including design, materials, cost and completion time. Budget and time overruns are usually the result of starting over because something was done wrong the first time.
Establish your budget
The first step to creating a budget for your home improvement project is to determine how much you can spend each month from your income without using other funding sources. Save up to avoid accumulating debt if possible, but remember that your project increase the value of your home. This possibility can help offset some of your costs.
Create a project plan
The effect that an improvement will have on your home's value is one of the most important things to consider when planning your projects. New carpeting, a steam shower and a second bathroom can all add greatly to home value, since everybody likes these things. However, more personalized touches can actually cause your home to lose value.
Find your preferred contractors
Some home improvement projects require a professional, no matter how much experience you may have with DIY projects. Do your research to ensure you make the right choice, since you’ll probably be paying thousands of dollars to your contractors. Word of mouth is usually your best source of information on contractors, including social media.
Create a project timeline
Once you’ve decided on the projects you’re going to do, the next step is to determine how long each specific project will take. Base your time estimates on the most likely scenario rather than the best case scenario, since delays are routine for large projects. You’ll also need to identify any projects that must be completed before you can start others.
Pack up your home
You’ll need to move many items out of a room that’s being renovated. For example, you’ll typically need to remove all the dishes and cutlery from the kitchen when remodeling it. You can do this just as easily as the contractors, but they’ll charge you for it.
How to plan for specialized projects
Any home improvement project may bring you happiness, but you may be surprised to learn that some projects won’t increase your equity as much as you think. Your return on investment (ROI) often depends on the room you’re remodeling.
How to plan for a kitchen remodel
Updates to your kitchen provide some of the best ROIs of all home improvements. HGTV reports that the ROI on kitchen remodels ranges from 60 to 120 percent. The most important rule to remember for the kitchen is to ensure you don’t make it fancier than the rest of the house or neighborhood.
How to plan for a bedroom remodel
A trendy design for a bedroom may be fine if you’re not planning on selling your house. However, a more traditional look would be better if you’re looking at a future resale. Features like a walk-in closet or skylight are good ways to attract future homebuyers.
How to plan for a basement remodel
Adding another room to your house can be extremely expensive, but reinventing an existing room can provide the same benefit at a much lower cost. Basements can work well as a game room or second living room. You can also turn them into a bedroom for an older relative or tenant.
How to plan for a bathroom remodel
Adding a second bathroom is the one room addition that can easily pay for itself when you sell your home. The ROI for this improvement is typically between 80 and 130 percent, according to HGTV. A half bath requires at least 18 square feet, which you may find in underused spaces like under the stairs. A full bath with shower will require at least 30 square feet, while a bathtub will need at least 35 square feet.
How to plan for a garage remodel
The average ROI for a garage addition is only 62 percent, so you should only consider this improvement if you need it for yourself. In addition to a place to put your car, a new garage also provides storage space for your yard equipment.
Which projects provide return on investment?
Each year, Remodeling magazine releases a Cost vs. Value Report, analyzing common renovations homeowners can make that offer the highest return on investment (ROI). Here are a few that can provide a high return on your investment.
Garage door replacement
Average Cost: $3,470
Increase in Value: $3,411
Older garage doors can come with a host of problems. They may lack modern safety features, make a ton of noise, or be vulnerable to thieves. Your old garage door may be working just fine but replacing it with a modern door and new tracks can net you the highest ROI at resale.
According to Fixr, a homeowner can typically handle this project on their own in nine hours and a professional can complete it in five. Whether you go the DIY route or hire a pro, make sure you choose a design that fits the architectural style of your home.
Manufactured stone veneer
Average cost: $8,221
Increase in Value: $7,986
Curb appeal is a big factor in getting the best price when selling your home. Adding stone veneer can boost curb appeal by giving your home a more sophisticated look. The timeframe for this project depends on the size of your home and how much area you plan to cover, but don't cut corners. Low-quality materials and poor installation can result in a project that looks cheap and may actually lower rather than improve the value of your home.
Steel entry door replacement
Average Cost: $1,471
Increase in Value: $1,344
If stone veneer isn't in the budget, a lower cost way to improve your home's curb appeal is replacing your front door. But a new door isn't just about appearances.
We might not think of doors as being technologically advanced, but new steel doors are more energy efficient than old wooden doors, and there are a wide variety of new lock systems that allow you to lock and unlock a door by entering a code on a keypad or tapping your smartphone.
Plus, it's a relatively quick fix. According to Angie's List, this project usually takes about four hours from set-up to tear down.
Wood deck addition
Average Cost: $10,950
Increase in Value: $9,065
There's nothing quite like a deck for summertime entertaining and relaxing. Adding a wood deck can boost your outdoor living space and create aesthetic appeal in your yard.
According to HomeAdvisor, a professional can install a standard deck with railings and a staircase in one to three weeks. To ensure your project lasts a long time, make sure it's built with high-quality, durable materials.
Minor kitchen remodel
Average Cost: $21,198
Increase in Value: $17,193
Even a perfectly functional kitchen needs a refresh occasionally. Refacing cabinets and replacing hardware, appliances, countertops, and flooring can add style and personality to an area of your home you use several times a day.
Of course, because most kitchens get so much use, remodeling this room can really disrupt your life. Realtor.com estimates you'll be without the use of your kitchen for approximately six weeks. For that reason, you might want to consider kicking off this project in the summer, when you can cook some meals on an outdoor grill.
Average Cost: $15,072
Increase in Value: $11,554
Siding protects your home from the elements. Rot, cracks, and gaps are not only unsightly, they jeopardize your home's structural integrity.
According to HomeAdvisor, the average siding installation project takes about two weeks, including removal of the old siding, prep time, adding insulation, and installing the new siding. You can usually get a better deal from siding contractors during their 'off-season' in fall and winter.
Vinyl window replacement
Average Cost: $15,955
Increase in Value: $11,855
If your home was built before 1970 and still has its original windows, they're probably made of single pane glass. Replacing them with insulated, low-E vinyl windows can lower your energy bill and improve your comfort in the home year-round.
According to Fixr, it takes a professional on average 30 minutes to replace a window, so this is one project that will likely create minimal disruption to your daily life.
Average Cost: $19,134
Increase in Value: $13,422
You spend time in your bathroom every day, so it should be inviting, as well as help you get ready efficiently in the morning. Updating your bathroom with ceramic tile flooring, new fixtures, and lighting can result in energy savings and make getting ready for your day more enjoyable.
A bathroom renovation typically takes two to three weeks, according to HouseLogic, but that timeframe can extend much longer if you install custom fixtures or change the layout. That may not be a huge issue if you have more than one bathroom in the house.
Grand entrance addition
Average Cost: $8,591
Increase in Value: $5,809
Is your front door looking a little uninspired? If you have the space, consider reframing the existing opening to add decorative glass and sidelights. Windows create a more open and inviting feel to your entryway and allow more natural light in your home.
Like replacing your entry door, this is a relatively quick project, although reframing for windows will add to the project's timeline. Two or three installers can typically install a double pre-hung door with top windows in about four to eight hours.
Master suite addition
Average Cost: $123,420
Increase in Value: $69,807
Many older homes don't have large master bedrooms. Adding a master bedroom suite with a walk-in closet and en suite bathroom can make your bedroom feel more like a luxe hotel. It may also contribute to family harmony if it means you're no longer competing for bathroom time with other members of your household.
The project time frame depends on the size of the addition and whether you build up or build out, but according to Realtor.com, you can expect the project duration to take at least one to two months.
How to finance your home improvement project
You may be able to pay for minor improvements like a new kitchen faucet out of your savings, but major home repairs like adding another bathroom often require you to obtain financing. Homeowners often use the equity in their house to pay for these expenses, which is much easier to justify when the repairs will increase your home’s value. Even when this is the case, it’s still best to pay off your mortgage before you retire if possible.
The methods of using your equity to fund home improvements may generally be classified into home equity loans and home equity lines of credit (HELOCs). A home equity loan is essentially a traditional loan that uses your equity as the collateral and pays a lump sum up front, typically with a term between 5 and 15 years. Lenders will usually require your equity to remain above a certain percentage of your home’s market value, often at least 20 percent. In this case, the total value of your primary mortgage and home equity loan couldn’t exceed 80 percent of your home’s market value.
A HELOC provides you with a line of credit up to the maximum amount that the lender approves. You can withdraw funds as needed, which is particularly useful for projects with unpredictable costs. Figure’s HELOC differs slightly from a traditional HELOC in that you receive the full amount up front like a home equity loan. However, you can continue drawing on a Figure HELOC as you repay the amount you borrowed.