Property ManagementMost Common Home Renovation Mistakes and How to Avoid Them by Stella Ryne June 24, 2019June 23, 2019 by Stella Ryne June 24, 2019June 23, 2019There are two things that potential tenants are looking for when it comes to choosing a suitable rental home – the neighborhood and the home itself. As an owner of a rental property or someone who is soon to become one, you’ll sometimes encounter a property that has an ideal location, even though the home itself is… well, less than ideal. A renovation would allow you to keep the first advantage while fixing the latter. Other than this, a renovation might help you get a better price if you intend to sell the property in the nearest future. All in all, there are several common home renovation mistakes to avoid that will help all of this come together.1. Miscalculating Your BudgetThe first thing you need to do is tend to the issue of finances. Try to make an accurate estimation of your expenses by listing all the major and minor expenses that you can think of. There are a lot of home renovation guides out there that could help you get quite thorough and you should check at least several of them in order to ensure that you haven’t missed out on anything. It might even be worth your while to download a renovation budget template. This list needs to contain construction worker wages, materials, licenses and permits, etc.The reason why we had to emphasize the word “try” when it came to the issue of expense estimation is due to the fact that there are many things that could and will, eventually, go wrong. While it’s impossible for you to know what and when, what you could do is give your project a bit more lenient budget so that you gain at least a degree of financial flexibility.One of the biggest problems with budgeting rental home renovation projects is the fact that they’re seemingly expensive. However, this is because you’re estimating them from the wrong point of view. For instance, if you decide to take a look at a roof renovation, what you need to consider is the fact that this is something that you do every 25 years. This is why, if you decide to look at a total cost on a monthly or yearly basis, you’ll get a much better sense of what you’re up against.Lastly, there are some people who believe that doing a room-by-room remodel is more budget-friendly, which is simply not true. If you do the kitchen this year and the bathroom next year, you still get to pay for the remodeling two years in a row. Instead, why not just get a home remodeling personal loan on a lending platform like OurMoneyMarket and get over with it right away. This way, at least next year you won’t have to suffer from the distraction that comes from managing a home renovation.2. Failing to Consider the Purpose of RenovationThe most important thing that you need to figure out is the purpose of the home renovation. You see, there are some improvements that boost the resale value of the investment or rental home and those that have a negative ROI (from a resale standpoint) but bring an amazing improvement to the overall lifestyle quality of your tenants. A minor bathroom remodel, garage improvements, and attic bedrooms can do wonders for the resale value of the place.As for the lifestyle improvements, you can always add another bathroom, add a deck to the backyard or slightly expand the kitchen at the expense of the dining area. The reason why these remodeling projects are listed here is due to the fact that their impact on the value of your rental property won’t be that great, especially when compared to the amount of money you’ll have to invest in order to see them through.3. Rushing the HireAnother thing you need to keep in mind at all times is the fact that the quality of works performed during a home renovation greatly depends on the skill of the workers in question. This is why rushing with the hire might just be one of the most difficult problems that you’ll ever face. This is why you need to ensure that the people that you decide to hire are the right ones for the job.Take your time to survey the company that you intend to hire and make sure to ask some difficult questions. For instance, what you’ll want to know is their previous experience with similar projects. Those who want to be extra careful might want to talk to previous clients of companies that they decide to hire. To some, this may seem like you’re being too careful. However, there’s no such thing as too careful when it comes to saving your own money.4. Skipping the InspectionBefore a home remodeling project, what you need to do is complete the inspection of the rental home in question. The first thing that this will give you is a chance to see all the structural weaknesses of the building. Failing to do so will A) be a missed opportunity to make an important repair to the rental home and B) a hazard during further works. Provided that you’re working on a tight budget, a home inspection can help you prioritize tasks.As far as the list of areas that you’ll have to inspect goes, you need to start with your electrical systems and then proceed with the basement drainage. These two will affect the post-remodel functionality of the rental home and improvement here may drastically lower the cost of your utilities. Next, what you need to focus on are the overall plumbing and the structural integrity of the house. For instance, if you aim to make a roof remodel, first make sure that the roof structure is in perfect order, instead of just replacing the shingles right away. This is also vital for any roof-related projects like the installation of solar panels.5. Forgetting About the Living SituationOne of the problems that may arise from this is the fact that the place might be off limits for a while, which can cause downtime in your profit and negative cash flow due to the fact that you can’t rent it out in this period. Still, you would be surprised at just how many tenants would agree to endure this in order for the improvement in their rental home, for as long as you’re willing to cover the expenses.For instance, working on one of your rental home’s two bathrooms won’t force the tenant to vacate premises, even though it will definitely be an inconvenience but the same couldn’t be said about building another story on the house. In other words, the first thing you need to do is make an estimate of just how big of an upset this remodel will make in the property’s living potential.If the lifestyle upset will be fairly limited, what you need to do is come up with a temporary plan. For instance, if there’s a kitchen remodel, they can order food for a while, while the upset caused by a bathroom remodel might be somewhat controlled by taking showers at the gym. Still, this is something that they have to agree upon and it’s you who has to offer to help them out.The two options that they have for a full remodel are – staying at a hotel or staying with friends and family. If they agree to pay for their own accommodation, you can decide to make this worth their while by deducting a part of the cost from their several subsequent rent payments. Staying with friends and family is more frugal but it’s incredibly easy for one to overstay your welcome if they’re not extra careful. At the end of the day, it’s always best to perform this in between tenants, if there’s a possibility for such a thing.6. Ignoring Long-Term SavingOne of the biggest questions when it comes to the issue of a home’s sustainability is whether it’s worth it or not. You see, due to the fact that the installation of solar panels may take between 6 and 9 years to pay itself off (up to 20 in some scenarios), it’s clear that this is a project that you don’t do on an investment home that you intend to sell shortly after. Same goes for door and window improvements, as well as the overall home insulation.Another factor that’s quite easy to lose from sight is the fact that the majority of these sustainability investments also benefit the safety of the home. Getting new exterior doors and windows will make this rental home a lot safer. Needless to say, this is also one of the first things that people are checking out when choosing a place to live.In ConclusionAs far as these decisions go, a home remodel is not something that you’ll do that often, so the mistake will haunt you for years to come. This is why you owe it to yourself to take all the time you need in order to make the best decision possible, as well as lay out all the plans that will make the execution of the project easier/more efficient. Keep in mind, however, that this probably won’t be the last time that you engage in a rental/investment home remodel, so you should also try to learn as you go.This article has been contributed by Stella Ryne. Start Your Investment Property Search! START FREE TRIAL CostsGuest BlogsHome InspectionRenovationsReturn on InvestmentTenants 0FacebookTwitterGoogle +PinterestLinkedin Stella RyneStella Ryne is an art historian, traveller, conscious consumer and a proud mother. When she is not trying to improve the things around her (and herself, for that matter), she likes to lose herself in a good book. She’s deeply into green practices, cherishing the notion that sustainable living and sustainable travel will not only make us far less dependent on others regarding the dwellings we inhabit and what we eat, but also contribute to our planet being a better place to live on. Stay in touch with Stella via Twitter and Facebook. Previous Post Boston Real Estate Market 2019: 5 Best Neighborhoods Next Post 5 Flaws in Your Vacation Rental Business Plan Related Posts The Best Tips for Forced Appreciation in Real Estate Investing Real Estate Investing for Beginners: A Guide to Passive Income Strategies Passive Income From Rental Properties: A Myth or a Reality? 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