5 Tips To Have In Mind Before Starting A Home Improvement Project
1 Avoid Running Out Of Money And Learn How To Finance Your Home Improvement Project.
First thing first, make sure you set up a realistic budget and know what to do before starting a home improvement project. Benchmark the scope of your project with other similar ones to come up with an accurate estimate. There are online tools available that can help you determine the realistic scenario. Get quotes for all of your desired projects to see if you can afford them. Explore your options on how to finance home improvements and the best home improvement loan available for you.
2 Secure a return on your investment
Have in mind that your home improvement project should always improve the value of your property in comparison to those in your marketplace. A simple way to calculate the return of your investment is by:
- A. Considering the present value of your home and adding the estimated cost for your project, including the interest rates of your home improvement loans.
- B. Comparing this total to other homes with similar improvements that are for sale in your area.
- C. Making sure that the total does not exceed 15 to 20 percent of your home’s net value
3 Obtain all Permits and Certifications
Make sure the project meets your local codes and that you have all eligible local authority certifications. This way you prevent any interruption to the project due to possible violations or investigations that can occur along the progress of the project.
4 Protect yourself when things go wrong
Prevent unexpected increases in the project costs due to accidents associated with the labor. For this, consider insurance coverage that will guard you from any liabilities or possible costs involved with labor accidents.
Many home improvement contractors end up subcontracting the labor such as builders, electricians and plumbers. The hired workers may not be full-time employees of the contractor and therefore are not covered under the contractor’s workers’ compensation policy. While some independent builders such as electricians and plumbers may carry their own workers’ compensation coverage, others may not.
You should verify the insurance coverage of the contractor and the subcontractors. If the coverage is insufficient, you may need to fill in the gaps by extending the limits of the liability portion of your homeowners’ policy.
5 Increase your homeowners’ coverage before you start
As your home value will increase with the improvements, you will have more value to protect. Don’t make the mistake of waiting until the remodeling is completed to increase the amount of your homeowners’ insurance coverage. You should do this before the improvement project starts. If you don’t, and the improvement is damaged or destroyed before it’s completed, you’ll probably have to pay for the loss out of your own pocket, turning your remodeling plan into an expensive job. Also, consider that when you purchase more insurance, your premiums will increase.
Now that you know how to prepare for a home improvement project and searched the best home improvement loan for you, read on to find out the 5 things you should know before getting a home improvement loan.
Please consult with your attorney, financial consultant/planner, accountant, and/or tax advisor for advice concerning your particular circumstances. The information contained herein is for general informational and educational purposes only and should not be construed as professional, tax, financial or legal advice or a legal opinion on specific facts or circumstances. The information or opinions contained herein should not be construed by any consumer and/or prospective client as an offer to sell or the solicitation of an offer to buy any particular product or service.