Renovating your home can be an excellent way to increase its value, enhance your living space, or improve rental returns. However, without proper planning, what begins as a promising project can quickly turn into a financial burden. Before you start tearing down walls or making major changes, here are some essential points to consider.
Before you invest a single dollar, ask yourself: What is the purpose of this renovation?
If it’s your personal home, consider whether you plan to stay long-term or if selling is in your future. For those renovating an investment property, the focus should be on adding value without overdoing it. Understanding your end goal will help guide your decisions and budget.
How much will your renovation cost? And just as importantly, what should it cost?
A good rule of thumb is to spend no more than 10% of your property’s value on renovations. Expenses can add up quickly, so be sure to get multiple quotes and plan for unexpected costs – they always come up!
Every area has a price ceiling—the highest price buyers are willing to pay for a property. Before starting your renovation, research similar homes in your neighbourhood to understand the market.
If you overspend, you risk pricing your home out of the market, potentially losing money when you sell. Focus on renovations that deliver a strong return on investment, such as:
While high-end finishes may look appealing, consider whether buyers are willing to pay extra for them. Keep your upgrades practical and aligned with market demand.
While DIY projects can save money, only attempt them if you have the necessary skills.
However, certain jobs should always be left to professionals, including:
Additionally, consider the time vs. cost factor. If a professional can complete the job faster and with better quality, it might be worth the extra cost.
There are several ways to finance a renovation, depending on your plans and budget:
Unsure which financing option is best for you? At 1st Street Financial, we can help you choose the right solution based on your goals.
A successful renovation relies on proper planning, budgeting and making smart decisions. Whether you’re upgrading your home or working on a project to increase its value for resale, focusing on high-impact, cost-effective changes will yield the best return on investment.
Thinking about renovating? Let’s discuss how to finance your project the right way.
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