From the supply chain to labor costs, being prepared is key…
With more and more jobs turning permanently remote or hybrid (spending a few days in the office and the other days working from home) renovations in the home are quite possibly more popular than ever before. It is the rising home values that have offered homeowners more room to make these repairs happen – by being able to budget and afford the renovation. Mortgage technology and data provider Black Knight, notes, “…The average homeowner gained $48,000 in tappable equity in 2021, a 35% increase from 2020. Homeowners will typically draw on a home equity loan or a lines of credit (HELOC) to finance those large renovation projects.” [Time.com /Next Advisor 2022] Building supplies, lumber costs have all risen. Estimating these costs can help you budget to prepare to sell your home, or to simply make it more comfortable as you prepare for turn it into your home office, add an addition…but what does it really cost to make a renovation? We all know the ROI can help greatly increase our home value. Understanding these costs and preparing for them will only help you in the long run. It is known the kitchen and the bathroom provide the best return of investment.
These updates – depending on how detailed you get and quite frankly, what is needed – can cost a lot. Don’t forget this includes the following:
- Labor Costs
According to Realtor.com, if we take 2,500 sq. home the average bathroom renovation will cost $9,000. The Kitchen will be around $10,000 – $50,000, with an average of $20,474. A new roof – which is extremely necessary when it comes to adding value to your home – averages at $20,000. Hiring a contractor is typically 10% – 15% of project’s total cost.
Besides savings, personal loans, credit and renovation loans there is the Home Equity Loan.
What is a home equity loan? A home equity loan is when you borrow money against the amount of equity you have in your home. What is equity? Equity is the difference between the market value of your home and what you owe on your mortgage. This would mean borrowing a lump sum upfront and paying it back in monthly payments at a fixed rate.
If you plan on taking on a major home renovation project in 2022 or 2023, the most important thing you can have is a team of contractors you trust and an understanding of the costs upfront. You should also anticipate the supply chain having an impact and always giving yourself a timeline for the project.
Thinking about buying or selling a home? You’ve come to the right place! Allow Dalton Wade Real Estate group to be your guide – find an agent ready to assist you, learn about communities and neighborhoods, search for all Florida Real Estate listings, while providing you with an exceptional experience – search www.daltonwade.com