What Would Remodeling Cost?
If both remodeling and moving appear to be viable options based on how you want to live and your home’s ability to handle a renovation, the next step is to find out how much a home remodel would cost. With several detailed estimates, you can figure out whether remodeling is in your budget and come up with a figure that you can compare with the cost of moving, which we’ll address in the next section.
Estimate the Costs
First, you’ll want to get three comprehensive bids from professionals. Depending on the scope of your home remodel, you might get bids from general contractors, architects, structural engineers and designers. In order to compare bids accurately, it’s essential to clearly define your scope of work in writing and present an identical scope of work to each contractor.
With these bids, you can begin exploring whether it’s financially feasible to make the desired changes to your home. Can you afford to pay cash for the project without dipping into your emergency fund (home remodeling is not an emergency) or your retirement savings? (Long-term financial security is more important than a pretty kitchen.)
Consider a Loan
If you cannot afford to pay with cash, do you qualify for a home-equity loan? To qualify, you’ll need good credit, steady employment and sufficient home equity. What do lenders consider “sufficient?” After taking out the loan, you’ll usually need to still have 20% equity in your home. For example, if your home is worth $400,000 and you owe $300,000 on your mortgage, you have 25% equity. You would be able to borrow $20,000 (which would leave you with 20% equity).
Home-equity loans have fixed interest rates that are higher than current interest rates on a first mortgage but lower than current interest rates on other forms of borrowing, and the interest is usually tax deductible if you itemize. The downside is that you can lose your home if you default on a home equity loan. (See Home-Equity Loans: What You Need to Know and Home-Equity Loans: The Costs for more on the topic.)
The current economic climate is another factor that could affect how attractive remodeling is. When the economy is booming, more homeowners have the cash to hire home remodeling professionals, and the increase in demand drives up prices and can mean it will take longer to complete your project because contractors are so busy. In a down economy, contractors may be hungry for work, with better availability and lower prices.
What if all of the bids for the work you want to do are way out of your price range, but you really don’t want to move? These inexpensive home improvement ideas might help you be happier in your home at minimal cost:
Hire a professional cleaning service. They will clean things you didn’t know were dirty because you’ve gotten so used to seeing them that way and clean things you knew were filthy but didn’t know how to address. Just having a spotless home can make a big difference in how you feel about it.
Hire a professional organizer. Having someone find a place for all the things that are cluttering up your space and making it look smaller than it really is can give you a fresh perspective on your home and how well it suits your needs. Maybe you just need to have a really big garage sale and add some shelves and bins to your garage.
Paint. A fresh coat of paint will cover up the dings and scrape marks your walls have accumulated over the years. A new paint color can completely change a room’s mood.
Install trim. New window and door trim, baseboards and crown molding can make a space look more elegant and finished. The materials and paint are inexpensive, and you don’t have to be especially handy to do the work yourself and save money if you can measure accurately and use a miter saw and a nail gun. Even if you hire professionals to do the work, you might be able to trim out your entire home for a couple thousand dollars.
Get new hardware. Change all the switch plates, handles and knobs in your home to freshen up the appearance of walls, doors and furniture. The change will be especially dramatic if you’re ditching cheap, builder-grade materials for nicer ones that make your home look more customized, or updating outdated pieces with modern ones.
Change the window coverings. You can get nice-looking but affordably priced blinds, shades and shutters from online vendors. They’ll show you how to take your own measurements and install the finished product. If you can use a tape measure and a drill, you can handle this cheap remodeling task yourself. Also consider adding or replacing curtains and rods.
These are just a few inexpensive home remodeling ideas to get you started. Search online and you’ll find hundreds more. Also check out Do-It-Yourself Projects to Boost Home Value and 7 Ways to Save on Home Remodeling.
Next, let’s figure out how much moving might cost.What Would Moving Cost?