This is the second post in a series on Financing Your Home Design Project. For the first in this series, click here.
In our initial post we discussed different avenues in which you can finance a home renovation. When looking down the proverbial barrel of a home renovation, the bottom line can be incredibly daunting, especially when you came into the project with a specific number in mind and see your costs blow right by that number.
In order to best approach a home renovation, whether you are working on a strict budget or not, you have to first consider whether the project is in itself a smart financial decision. The hard truth of the matter is – sometimes, it just isn’t.
When it comes to your home – we always tell our clients, friends, families, kids’ teachers, kid’s teacher’s families, you name it – to design your home for you, not for resale value. Why? Because this is YOUR home. You want to love living in it. Design for your family, the way you live in your house, the way you will live in your house down the road.
Now, that being said, if the cost of your renovations and the value of your home add up to be far more than the expected value of both in five, ten, twenty years – then maybe you are pouring too much money into the space and you will never see that return if you do sell.
We recently recommended a client against purchasing a property because the estimated cost of the renovation ($500k) plus the cost of the property ($2M) would be far more than the property would be worth, even after the renovations. There’s not a great chance that they would get their ROI on the renovation if they had to sell. Guess what? Our clients went ahead anyway and we’re moving forward with the renovation. Why? Because they loved the house, the location, and the possibilities of the space. They’re designing the house for them. And that’s what we live for.
For us, it’s all about ensuring our clients understand that making a sound decision for their family’s quality-of-life does not always perfectly line up with making sound financial decisions – and that’s ok as long as you understand that going in.