In light of the current economic crisis and with the battle royal over the stimulus plan raging in the Senate, do homeowners dare to think about sinking a bunch of money into remodeling their home?
The answer depends largely on how long a family plans on staying in their house. Generally speaking, the longer you plan on staying in your home, the sooner you should consider big remodeling projects because you’ll be able to enjoy the improvements longer and the market will have time to turn in your favor. Now is definitely not a good time to sell.
Another key thing to consider is your financial situation. Have you saved enough to pay for the project? Are your savings the right type of savings, meaning are your savings liquid and easy to get at or do you have to sell some other assets, like real estate, which may take some time to convert to cash? Have you looked into financing options? There are many ways to finance a remodeling project. Borrowing against your home’s untapped equity is a viable option right now because of low interest rates.
An industry specific issue worth noting is the fact that construction costs, particularly material costs, are expected to rise. In fact, the cost of doing a project, in relative terms, will probably be more expensive the farther in the future you do it. In the meantime, your house will continue to age. The roof will still need to be replaced and you will still have to endure cramped quarters.
“A lot of times we hear people say they want to wait – it’s not the right time. But there’s never going to be an ideal time to remodel. Costs will always rise and construction will always be a bit of a headache. That’s just the way it is,” says architect Mark Fox, co-owner of design/build firm Gardner/Fox. “But six months after the project is finished when the bills are paid and the inconvenience is gone, we’ve never heard a client say they regret their decision to remodel. If a remodel enhances the time that a family spends in a home, of course it makes sense.”
With the slowdown in new construction, more contractors are in the market for work. In fact, many contractors are more interested in making price adjustments to get the work. Not radical adjustments, because wages and materials are still high, but there is more flexibility than before. For the savvy homeowner, such an environment is an excellent time to find someone to take on a project. Not only are you likely to get lower and more competitive estimates, but also you’ll likely be more successful negotiating for other favorable terms such as an earlier start date.
Regardless of the type of project you ultimately end up doing, the same rules for selecting a contractor should apply. Seek references and ask for multiple bids to get the best deal. By leveraging your home equity and your knowledge about building costs and the home improvement climate, now you can get the best contracting bang for your buck. Remodeling now doesn’t just make sense, it makes cents.
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