Here’s the thing about home renovations. Though they can be worth it, they can also be quite costly. It’s the biggest thing that deters prospective renovators, because they assume that they’ll be throwing away their life savings with not that much return on investment. Well if you were smart enough to visit the blog of the Australian Heritage Homes team, you’re already well on your way to making sound investments with dividends for decades. We stood up this blog as a means to showcase the work that we’re most passionate about and the news of the industry that we think could benefit you. And today, that news is all about your wallet – specifically, keeping as much money as possible in there. We’re talking about the smart ways to plan for and pay off your home renovations.
The biggest, most common and easiest to avoid pitfall is not planning. We cannot stress enough how important it is to properly prepare for any large-scale project. This means being really realistic about exactly how much money you can spend as well as knowing the amount of time that you’re willing to put in to the work. This can be an important trade-off. If you have ample amounts of time, it can offset the costs that you’re putting in to the project, especially if you’re taking care of tasks that you would normally pay a professional for.
As far as financing goes, the priority should be avoiding credit card debt wherever possible. If you’ve properly followed the aforementioned step, then hopefully you’ve set aside the amount you need to execute everything properly. Bonus points if you’ve managed to save an excess of cash, because then there are no surprises if the work creeps out of your original scope. Best practice is to add 20 percent on top of projected costs to keep you calm and comfortable.
If you’re not able to pay for the work upfront, make sure that you’re separating the work into chunks that you can afford. You don’t want to be halfway through an important step and have to stop the home renovation altogether. Customers spent more than 140 billion in home renovations and updates last year, and that number will only continue to climb. Banks and financial institutions know this and they’re hungry for the business of younger generations. That’s why the credit card rates that they promote may seem very appealing. There’s nothing wrong with taking advantage of the resources available to you, with one caveat – you must read the fine print. That’s where they’ll suck you in and you’ll end up paying far more than you initially intended on your monthly bill. Look for late payment hikes, if your interest will jump after a certain amount of time, and if you need to stay within a certain balance.
Should all else fail, you’ve got a partner-in-crime with the members of the AHH team. Give us a call and we’ll be happy to answer any questions that you have.