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Renovate Your Home Without Wrecking Your Budget

These remodeling do's and don'ts could help you make the most of your home -- and potentially even increase its resale value

HAVE ALL THOSE HOME IMPROVEMENT SHOWS got you thinking about renovating your kitchen, or knocking down some walls and expanding your living room? You’re not alone. In fact, in 2017, homeowners will spend an estimated $317 billion on home improvements and repairs, up 6.7% over last year. Their motivations are generally twofold: to make their lives a little nicer by enhancing the space they live in, and to protect their home’s value.

In addition, homeowners are frequently more willing—and able—to tap their residence’s equity with housing prices rising. And the right kind of home renovation can help make your home worth more. But it’s worth keeping in mind that even a moderately ambitious renovation project can be expensive and time consuming.

Before you start researching contractors and picking out paint colors, make sure your time and money will be well spent and that your project will add to your home’s value — not just your stress level. Here are a few do’s and don’ts to consider.

Renovate or not?
First, check out comparable homes in your area. Would your home suffer by comparison if you put it up for sale? How many bathrooms and bedrooms do they have, on average? Do most have gourmet kitchens and finished basements? If you decide you want — or need — to keep up with the Joneses, then do a little research to see how likely it is that you’ll be able to recoup the cost of your proposed renovation when you sell your home. (The chart below can help.) How much would it matter to you if you couldn’t eventually recoup those costs?

Don’t price yourself out of the market. As you think about your proposed renovations, also keep in mind that there’s a risk that you’ll make your home more difficult to sell by adding too much to its value.

Even expensive renovations don’t always make up for their costs when you put your home on the market.

Putting in that gourmet kitchen might make your house the most expensive on your block if you try to recoup the cost when you sell. Even expensive renovations don’t always make up for their costs when you put your home on the market. According to Remodeling 2017 Cost vs. Value Report (, for instance, you are likely to recapture only 65.3% of what you spend on a major kitchen remodel.2

Do stay open to the possibility of moving to a new home as an alternative. If, after pricing out your renovation options, you find that the cost — and inconvenience — outweigh the gains, you might consider looking for a house that already has the amenities you want.

Decided to go ahead? Now, how will you pay for the renovation?
With any renovation project, it’s easy to get caught up in the fun decisions — selecting your fixtures, appliances, colors and décor. But before you get too carried away, make sure your finances are in order.

Don’t start without a budget. A ballpark figure isn’t quite enough — it’s important to establish exactly how much you’re willing to spend. There’s an all-too-common phenomenon known as “scope creep,” in which you add a little of this and a little of that, and before you know it your budget is blown. Knowing (and sticking to) your number will help you determine early on what you can afford — and help prevent disappointment and financial stress later on.

Do research financing options. If you’re not paying for your renovation with the cash you’ve saved, you’ll need to borrow money. A home equity line of credit may be an attractive option, allowing to you pay your expenses as they come up. If you have enough equity in your home and your current mortgage interest rate is higher than rates for a new mortgage, you might also consider a cash-out refinance. If you don’t want to borrow against your home, look into traditional bank loans or credit card promotions, including limited-time, 0% APR financing or reward programs that offer cash back.

How’s your money best spent?
What’s a better use of home improvement dollars — updating a serviceable but somewhat tired kitchen or replacing a houseful of old, drafty windows? When you eventually sell, potential buyers may love a new kitchen, but they’re likely to balk at glaring structural issues.

Don’t underestimate the value of quality structural upgrades. Investing in redoing your siding may not be as sexy as adding a master bedroom suite, but it can be pretty attractive when it comes time to sell. According to Remodeling 2017 Cost vs. Value Report, new siding can recoup 76% of the initial cost (on average). Not only does it give your house a visible facelift — it also makes for a warmer, more energy-efficient home.

Do look for smaller projects that add immediate value. Consider replacing your front door with a high-quality door. First impressions matter and it’s the first thing friends, neighbors — and potential buyers — notice when they walk into your house. Rather spend your renovation budget elsewhere? Add a fresh coat of paint to the door and buy a new welcome mat.

Do think about what you may need in the future. Are you planning to stay in your home as you age? Then you might not want your proposed renovation to include additional stairs, or a doorway or hall that might not be easily navigable with a wheelchair or walker. Think instead about things like a shower with seating and an anti-slip coating, or kitchen cabinets with pull-up and pull-down shelves.


Click on the arrow for some upgrades you can discuss with your contractor.


Safe and Secure

You can use your smartphone, tablet or personal computer to operate a standalone security system, or to augment one provided by a home security company. You’ll need a camera ($150 to $200) that streams video to your phone or tablet via an associated app.


The Connected Kitchen

Your smartphone or computer can allow you to control your oven’s temperatures remotely, or to use the built-in computer in your refrigerator to keep an inventory of what’s on your shelves. Expect to pay upwards of $3,500 for a smart fridge, $1,400 or so for an electric range.


Bright New Ideas

A wireless lighting system lets you manage your home’s energy usage from anywhere. One app allows you to run your house remotely—turning lights on or off, setting your thermostat, monitoring home security and opening locked doors. You can get a pretty sophisticated setup for $200 to $300.


In Hot Water

According to the U.S. Environmental Protection Agency, Americans use as much as 1.2 trillion gallons of water for showering. Much of that goes down the drain each year as we wait for the water to heat up, and about $2.5 billion is wasted in heating water.1 A recirculation system, usually costing less than $400, can deliver hot water instantly, potentially lowering your water and energy bills in the process.


Drips Dried

A leak detection system with a solenoid valve (approximately $200 to $500) signals when your pipes malfunction—or, in some cases, if a tap is left running. It then shuts off the water, potentially preventing a flood and saving you thousands of dollars in home repairs.


Window Shopping

Low-emissivity (low-e) windows capture the sun’s warmth and then emit low levels of radiant thermal energy—helping heat your home. You’ll pay about $15 per square foot or more for low-e glass, but will recover the cost (and then some) over time through energy savings.


Hear Here

A favorite catchphrase in home entertainment is “multi-room wireless audio”—in other words, being able to play different sounds in different rooms, using just a touchscreen controller or an app on your smartphone that’s connected to your digital music collection. Systems generally run between $200 and $400.


Up on the Roof

Solar has been around for a while, but recent advances have brought the cost down—with many tax advantages still in place. New in the last decade are easy-to-install photovoltaic roof shingles. According to one manufacturer, a cluster of 350 shingles could cut your electric bill by 40% to 60%.2

Do it yourself or hire a pro?
You can sometimes save money by tackling a renovation project — or part of it, like painting or spackling — yourself. With thousands of how-to videos online, it’s easier than ever to become a do-it-yourself (DIY) expert. But know your limits. A project that has to be done twice is the most expensive project of all.

Don’t take on a project beyond your abilities. To save money, it might seem like a good idea to tackle costly tasks. But some jobs, like rewiring an outlet or retiling a bathroom, are best left to the pros. Taking on a project for which you’re not qualified could be dangerous as well as ultimately more expensive (when you have to hire a contractor or handyman to fix your work).

Do your homework before hiring a professional. Recommendations from friends and relatives may be useful, but don’t stop there when you’re hiring an electrician, plumber or contractor. Nationally-known websites offer local customer reviews that can be valuable resources. And before you hire anyone, always get a face-to-face consultation and cost estimate.

Remodeling your home is a big project even if someone else is doing all the work. But creating the home you really want can be deeply satisfying — especially if you do it at a cost that makes you feel as comfortable as your house does.

  • Learn how your home equity can renovate your finances
  • Meet with an advisor about financing your home renovation
  • Discover more articles and videos about unlocking your home's value

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Source: January 19, 2017 — Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University.

Source: Remodeling magazine’s 2017 Cost vs. Value Report, National Midrange Remodeling Projects  © 2017 Hanley Wood, LLC. Complete data from the Remodeling 2017 Cost vs. Value Report can be downloaded free at

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