people choosing floor tiles

Homeowners Guide: Renovation Is Cheaper than Moving

Housing prices around the world are still soaring, with some breaking 15-year to 17-year records. According to Fortune, annual home price increases range from 32 percent in Turkey to 8.9 percent in the Czech Republic. Next to it are New Zealand at 22.1 percent, Luxembourg at 16.6 percent, and Slovakia at 15.5 percent. The United States and Sweden tie for fifth place at 13 percent.

In the U.S., this was the highest annual increase since December 2005.  CoreLogic data shows that Australia’s annual home price increase was at 13.5 percent in June, higher than that of the U.S. and Sweden, and breaking a 17-year Australian record.

Other countries’ annual price increases in the Forbes list include Austria at 12.3 percent, the Netherlands at 11.3 percent, Russia at 11.1 percent, Norway at 10.9 percent, Canada at 10.8 percent, the United Kingdom at 10.2 percent, Peru at 10 percent, and Lithuania at 9.1 percent.

It may seem tempting for homeowners to sell at today’s prices. However, unless you have a second house you can move to, you will have difficulty finding a new place. If you want a better home, your income from the sale may not be enough to cover it. Even if you downsize, it will be challenging to find a suitable house because inventory is low worldwide.

Renovate to Improve Your Home

Because moving to a better house is not advisable today, renovation is the better option. You can still add the features you want to your existing home and at a lower cost. You can also benefit from the increase in your home equity caused by the significant increase in housing prices coupled with historically low mortgage rates. Statista reports that mortgage rates around the world fell in 2020. With more equity, you can now borrow against it at a low interest rate to finance your renovation project.

According to HSBC, you can refinance your mortgage and lower your monthly payments at the lower interest rate or shorten the amount of time to pay off your loan. The lower interest rate also means you build on your equity faster. Another option is to get a home equity loan which is a line of credit that allows you to borrow only what you need from your equity when you need it. You are charged interest only on what you borrow, and minimum payments are based only on interest.

man designing stairs

Pointers on Renovating Your Home

Vogue advises homeowners to plan renovations well, do everything in one go for efficiency, and ensure design consistency. Doing several renovations in several phases will cost more. Make sure to allow generous buffers in your budget and timeline. These projects can easily go beyond your initial estimates.

You must also find affordable accommodations elsewhere while renovations are underway. This is best for you and the contractor and workers. If the renovation is on a new house, though, Vogue recommends that the family live in it first for a certain period to determine what changes you need to suit your lifestyle.

Homeowners must hire experts rather than doing DIY projects or hiring non-professionals. Research well to find a reliable and affordable contractor. You must also avoid taking shortcuts and choosing cheap materials. All these faulty decisions can lead to mistakes that will be even more expensive to fix.

Homeowners must know what they want and gather pictures that clearly show these so that you can communicate more clearly with the contractor and tradespeople. This will prevent misunderstandings that you will only realise once something is already built.

External renovations add the most value to your house and, therefore, your wealth. This means that you will get an even higher price if you do decide to sell it later. The study, Valuing Curb Appeal, published in The Journal of Real Estate Finance and Economics in 2020, shows that a property’s curb appeal can increase the home’s value by as much as seven percent.

Millionacres notes that hardscaping is popular among homeowners and buyers. This means adding permanent non-plant features outdoors that extend the indoor living areas. You can add a deck, patio, or gazebo. You can also have a roofed outdoor living room or kitchen; this works well beside a new pool or a fire pit.

Instead of installing a lawn of grass around these, consider using artificial grass instead. It will save you the effort and expense of maintenance, such as constant mowing and watering. It will save you a large amount of water and will not need any fertilisers. Whatever the weather, it will stay looking good without turning brown or muddy. Nowadays, synthetic turfs look like natural grass and feel like real grass underfoot.

You will be surprised at how different your home will look and how happy you will be with it after a few renovation projects. These will be worth your investment of time, effort, and money.

about the author

Share this on:

Scroll to Top