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You deserve to thoroughly enjoy your home. You should feel comfortable in every room and not constantly be agitated by the small things, like not having counter space in your kitchen or dealing with a bathroom with awkwardly arranged fixtures. If you’re not happy with certain aspects of your home, it’s not hard to remodel, but it can get a bit pricey.
Whether you’re looking for supplemental funds or you don’t have any budget at all, here are some ideas for generating some cash to cover your remodeling needs.
1. Consider Investing
It’s not a ‘get rich quick’ solution and won’t work for everyone, but if you have the time and patience to start investing now, you can generate the funds to either remodel your home or sell it and buy your dream home later on. If you go all-in and learn from the right people, you can get a good head start. Some investments can get you the cash in a year or two if you invest enough money to start with, but other, more complex strategies will produce bigger profits over time.
Investing is a long-term strategy, but it’s well worth the time it takes to be successful. In fact, if you start now, you could eventually qualify to become an accredited investor, which means you’ll have access to special opportunities not available to the general public. For instance, you can access private, off-market investment opportunities.
Invest.net claims, “There are numerous untapped opportunities to be found in private investments. Roughly 160K SMBs produce $10M to $100M in annual revenue, but less than 1% of private equity fund assets under management target these private companies.”
If you’ve always thought about investing, now is a good time to get started. It can help you get the funds for your remodeling needs now, but it can also help you build long-term wealth.
2. Get a Bank Loan
Many people choose to take out a loan to cover their remodeling costs. This is beneficial because it ensures you can have the work done, and as long as you make your payments, you shouldn’t have to pay much, if any, interest.
If you’re planning on selling your home, borrowing money is a good option because you want your home to be as appealing as possible to potential buyers. This is especially true when you need to remodel the bathroom or kitchen.
According to renovation statistics published by Bankrate, kitchen remodels are the most popular, yet are also the most expensive. The median spend on kitchen remodels is around $15,000 per project. Next up are bathroom remodels at around $9,000 per project.
Although they’re the most expensive jobs, people are more likely to buy a residential property when the bathroom and kitchen are in excellent shape and are aesthetically pleasing. If there’s anything fundamentally wrong with the way your bathroom was built – like having the fixtures too close together or not being able to open the door without hitting the toilet, a remodel is warranted.
3. Get a Home Equity Line of Credit (heloc)
A HELOC is a secured loan backed by your home that typically has lower interest rates than an unsecured loan. You’ll need at least 15-20% equity in your home to qualify, and the amount of money you’ll be eligible for will be based on your home’s value, your outstanding mortgage balance, and your personal credit score.
If you qualify, you’ll have a spending limit, but you can take what you need as it’s needed. This is what makes a HELOC loan ideal for remodeling. You might start with your bathroom or kitchen now and in a few months you may want to start remodeling another area.
However, since this type of loan uses your home as collateral, only pursue this option if you know for certain you can make your payments. Also keep in mind that your interest rate might vary, which can make your payments increase.
4. Get a Home Equity Loan
Like a HELOC loan, a home equity loan will provide you with cash based on the equity you have in your home and your home will be used as collateral. However, the interest rate is fixed and you will receive the money in a lump sum.
How Much Should You Renovate?
Whether you’re just renovating a small portion of your home, or you need significant work, first consider if it’s worth the time and money. Can you move into a new house that already has the features you want? Or is there a reason you want to stay where you are? Remodeling can get expensive, but at the end of the day, the only thing that matters is your personal satisfaction.
