Whenever anyone renovates a home, they’re usually so overcome with excitement and anticipation that it’s easy to overlook a few important financial considerations. A project usually leads to a more comfortable living space, a boost of the home’s value and a sense of self-satisfaction. But renovations have a subtle way of putting your financial health at risk. What can you do to avoid some of the typical traps that projects can lead to? Here are a few of the most common financial risks that renovation can bring, along with commonsense ways to avoid them.
If your project adds a significant amount of value to your home, it might “outgrow” your homeowner’s insurance coverage. Always check before making a renovation and make sure to adjust your coverage to reflect the added value of the property. Remember, not all renovations are covered by a standard house insurance policy.
Insurance professionals suggest that homeowners incrementally ramp up their coverage as a project moves toward completion. When you are making a major change, like adding a new wing to the home or expanding garage space, most insurers will want you to list the details of the addition within the new policy. It always makes sense to speak with your insurance agent before any renovation project gets underway. Otherwise, you risk losing your homeowners coverage, which is a violation of most every mortgage contract.
This risk also comes under the general heading of “homeowners’ insurance,” but only applies to do-it-yourself renovations. It’s a common practice for homeowners who do DIY projects to enlist the aid of friends and family. Your close friend or family member might be glad to help you install the new deck or tile the kitchen floor, but what if they get injured during the course of the job?
To avoid having to pay expensive medical bills out of your own pocket, you can contact your insurance agent before the project begins and explain your intention to use non-professional help on your DIY renovation. The insurer can add or increase no-fault medical coverage with the stroke of a pen. This is a perfect example of spending a little bit of money to save a lot.
There’s a temptation with any renovation project to “do everything at once.” On the other hand, a tiny bit of self-restraint will pay big dividends. Homeowners who start out with one small job, and complete it before beginning another, are in a better financial position than those who borrow a bundle for a major job.
You’ll save interest and put less strain on your monthly budget by taking on a home renovation “one piece at a time,” as that old Country tune suggests. Plus, by starting out with a small job, you’ll gain experience about budgeting, construction practices and cost estimates that will help you plan for larger jobs down the road.
If you have some cash set aside for a “rainy day,” this is the rainy day. When you self-finance even 10 percent of a home renovation project, you stand to save a bundle in interest on future loan payments.
See all details: Modern Farmhouse with Front Porch.
Architect & Builder: Wilson Design & Construction, Inc. (Instagram)
Interiors by Marie Holland (Wilson Design & Construction) and Sally Pace (Turner’s Fine Furniture Valdosta).
Photography: Laurey Glenn Photography.
Thank you for shopping through Home Bunch. I would be happy to assist you if you have any questions or are looking for something in particular. Feel free to contact me and always make sure to check dimensions before ordering. Happy shopping!
Wayfair: Up to 70% OFF – Memorial Day Clearance!!!
Serena & Lily: Enjoy 20% Off Memorial Day Sale with Code: SUMMERPREP
Joss & Main: Warehouse Clearout – Up to 70% off!
Pottery Barn: Buy More Save More + Free Shipping – Use code: SAVEMORE
One Kings Lane: High Quality Design Decor for Less.
West Elm: Buy More Save More Sale!!!
Anthropologie: See the super-popular Joanna Gaines Exclusive line!
Urban Outfitters: Hip & Affordable Home Decor.
Horchow: High Quality Furniture and Decor. Up to 30% off the entire site!
Nordstrom: Up to 40% OFF. New Decor!
If I am wrong, right me. If I am lost, guide me. If I start to give-up, keep me going.
Lead me in Light and Love”.
Have a wonderful day, my friends and we’ll talk again tomorrow.”
Luciane from HomeBunch.com
Get Home Bunch Posts Via Email
“For your shopping convenience, this post might contain links to retailers where you can purchase the products (or similar) featured. I make a small commission if you use these links to make your purchase so thank you for your support!”
No Comments! Be The First!