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MARKETANALYST.US / ECONOMY & WORK

Remodeling Your House to Increase its Value? Here are Factors to Keep in Mind

Explore vital aspects of home remodeling insurance, budgeting, and design to ensure a smooth and successful renovation journey.
PUBLISHED APR 6, 2024
Cover Image Source: Home remodeling project (representative image) | Pexels | Photo by Nothing Ahead
Cover Image Source: Home remodeling project (representative image) | Pexels | Photo by Nothing Ahead

Although homeowership costs in the US are making it harder for Americans to afford a house, there are those who are remodeling their living spaces to increase property value. But various factors including insurance coverage, budgeting, and design planning also need to be considered before going ahead with renovations. Whether you are planning a minor renovation or a major overhaul, understanding these key aspects will help ensure a successful and stress-free remodeling experience.

Unsplash | Photo by Milivoj Kuhar
Home remodeling project (representative image) | Unsplash | Photo by Milivoj Kuhar

When homeowners embark on remodeling projects, they often aim to increase the value of their property. However, a higher pricetag comes with heightened repair expenses in the event of unforeseen damages like fires or natural calamities. Hence, it's imperative to reassess homeowners insurance coverage during remodeling. Failure to do so could leave homeowners underinsured in case of a total loss, necessitating borrowing or settling for a smaller rebuild. Augmenting homeowners insurance can mitigate such risks. By informing their insurer about planned updates, homeowners can adjust policy limits accordingly or explore new policies altogether.

Rates vary significantly among insurers due to distinct risk algorithms and property factors like location, size, and finishes. By obtaining quotes from at least four to five insurance companies, homeowners can identify competitive rates tailored to their specific needs. Although homeowners insurance discounts are less prevalent than those for auto insurance, bundling policies, owning a new home, or upgrading the roof can result in potential savings. Homeowners may also consider raising deductibles to reduce monthly premiums, though this may lead to increased out-of-pocket expenses during claims. Given that obtaining homeowners insurance quotes can be a time-consuming process, it's advisable to initiate it early, even before completing a remodel.

Pexels | Photo by Cal David
Home remodeling project (representative image) | Pexels | Photo by Cal David

Before diving into your home improvement project, it's crucial to establish a budget that aligns with your financial capabilities and project goals. Begin by gathering estimates from contractors or seeking advice from friends who have undergone similar renovations. These insights will provide a realistic understanding of potential costs. To account for unforeseen expenses, it's wise to allocate an additional 10-20% of the estimated budget. Factors such as outdated electrical systems requiring upgrades or preferences for higher-quality materials may arise, necessitating extra funds. Having a buffer in the budget ensures financial flexibility to address unexpected challenges without derailing the project's progress or compromising on desired outcomes.

Designing your remodeled space is where creativity meets functionality. You can start off by immersing yourself in inspiration from magazines or online sources, collecting images of rooms that resonate with your aesthetic preferences. Delve into the planning process by considering crucial elements such as the layout of the space, and prioritizing needs over wants based on budget constraints. Assess which aspects of the project can be handled with DIY hacks and where professional assistance is warranted. To sum things up, envision the style of furniture and fixtures that will harmonize with your envisioned space, ensuring a cohesive and personalized transformation.

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