So you’ve decided to renovate. Do your plans include a new kitchen, new bathroom, house extension or a bit of DIY? No matter how big or small your project, you may need to borrow money to pay for it. Here are a few options to consider.
Equity is the difference between the bank’s valuation of your house and the amount you owe on the loan. Equity can build up over time either because your home has risen in value or you’ve paid down your loan balance. For the vast majority of home owners, renovation means finding the right balance between what you would like to change in your home and the financial resources you have available for the job.
Praesidium Life can help you with the finances to renovate your home, you just need to work out exactly how much you want to spend and where you want to spend it.
If you are renovating for yourself, think about what you need now and what you'll need in the future such as an extra room for a larger family or elderly parents or possibly a larger garage for a second car.
It is important to recognise and work with the assets your house has, for example an architect may be able to help reorganise your floor space so you have more living area and less dividing walls. An architect will also help you utilise natural light and heat sources.
If you are planning to sell your property in the near future, then you need to consider the tastes of potential buyers. Renovations that are most likely to increase your resale value are a new kitchen, an extra bedroom or study, or an entertainment area such as decking or landscaping.
You also need to take into consideration the other houses in the area, if you renovate in a style inconsistent with the houses in your street, you could lower the value of your house.
The prices in the area are a good indication of how much you should spend. As a general rule, don't spend more on your renovation than the best house in your street is worth. You need to make sure that you will recoup the amount that you spend. A real estate agent will be able to help you estimate how much to spend and what your returns will be.
There is also little use spending money renovating a house that is structurally unsound. It will mean that you won't get the return on your investment.