How to Renovate Your Home Without Getting Into Unexpected Debt
Behind the cost of our home itself, home renovation costs have been our biggest purchase of the past decade. We have spent £25,000 renovating our home since we moved in, which has added an average of around £8.5k to our annual expenses since moving in. Home ownership doesn’t come cheap.
We bought a fixer-upper with plans (or delusions of grandeur…) of the way we wanted our house to look and function, without any idea of costings or the amount of work entailed. That’s how we ended up in debt.
We are exposed to so many resources urging us to put our stamp on home ownership. Between social media #homeinspo and interest-free credit in every furniture retailer, being in debt is sold as a small price to pay to create the perfect space. What I would love to see is the bank statements of the people behind those beautiful Instagram feeds of their lovely homes, because I don’t believe so many of us would subscribe to the idea that a perfect home equates to a perfect life if we know the true cost behind it- financial or otherwise.
One of the things we kept repeating when we were in the midst of renovating was, ‘It’ll all be worth it in the end,’ and it really was, but I would do so many things differently. So here are my tips for any fellow renovators out there who want to get it right first time.
Factor Renovation Costs into the Property Price
If you are buying a fixer-upper, add the cost of renovations into the purchase price because ultimately, this will be the cost of your home. Often, buyers are swayed by the rock bottom pricetag on a ‘project’ home, but once you factor in £70k to gut the place out, your potential bargain turns into a money pit. And if you haven’t got the money to cover the costs of home renovation, factor in the interest you will pay in debt, and what those extra repayments will do to your budget.
Quotes and Budgets Are Usually Exceeded- So Plan Ahead
We had eight different renovation projects and only one came in on budget, with the rest exceeding the quote we were given. The lesson: you tend to pay more than quoted! Inevitably, costs will spiral.
With regards to your own budget, unless you are the most meticulous of planners, there is always something extra that you need to factor in. And when we have a budget, we tend to spend at the top end of the budget, which leaves very little room for error. For quotes and budgets, add 20% to your initial figure and what you will have is the true cost- anything left over is a bonus.
Beware of Hidden Costs
When you are living in your property while renovations are ongoing, remember that you might not have access to certain areas and you need to make alternative arrangements. This is particularly relevant for kitchen and bathroom renovations, where you are forced to figure out how to function without these basic amenities. Without a place to cook, the cost of eating out can stack up spectacularly, and even things like doing a daily coffee run can eat into your budget.
Buy Cheap, Buy Twice
We’ve all been there- we get several quotes and one has really undercut the competition. It’s a no brainer to go with the cheapest quote, but alarm bells should be ringing if it’s seriously cheaper than the rest. Has this person got insurance, are they fully qualified, can they supply references or examples of their work? If the answer is yes, great, but if not, don’t risk it!
Our experience of buying cheap meant we paid over £1k in repairs, with our kitchen project delayed by three weeks. Honestly, it’s just not worth it.
Have an Emergency Fund
Always have an emergency fund- renovation or no renovation. It’s inevitable that things crop up that weren’t part of an estimate, like damp is uncovered when you strip walls, ceilings need to be levelled, emergency plumbers need to be called or workmen don’t show up (all true stories from a really fun time in my life…!) and you will be so glad that you aren’t having to hand over your credit card when they do!
I hope some of my tips are helpful to you if you are thinking of working towards your dream home. Happy home renovating!