by Phillip B. Burum, DR Horton,
President, Building Industry Association (BIA) Baldy View Chapter
National Remodeling Month in May is the second month of our nation’s season-long celebration of the benefits of homeownership to homeowners, their communities, their families and the economy.
The more than fifty themed shows that have aired on cable and network television over the past decade are reasonable evidence of American’s fascination with home improvements. While these shows tend to provide a fair share of drama, glamor, a bit of humor, and even a worthwhile tip or two; the underlying subject is a key component of maximizing American homeownership rates.
Spring is the time of year that many begin home improvement projects to make their homes more comfortable or prepare them for sale. There are many reasons for making specific home improvements but, consideration of the financial impact should always be at or near the top of the list of priorities.
Whatever your reason for taking on a remodel or making substantive improvements, as with any important project, take the time to develop a plan. There are great tools available for the DIY (do it yourself) homeowner, from step-by-step literature to comprehensive video tutorials online. If you have time, you could also stream all forty seasons of This Old House [my personal favorite] but, for those of us who don’t have 900 hours to get through the entire series, below are a few general tips that we hope you will find useful when considering a professional remodeling job.
Start by locating a skilled local contractor. The National Association of Homebuilders (NAHB) website at www.NAHB.org is a great source for identifying reputable contractors. The site includes a list of NAHB-trained and certified remodelers as well as important links to crucial information that should be considered when developing an overall plan. These include cost estimating tools, step by step improvement guides, and advice on maximizing resources.
The next key to a successful remodel is to establish a budget and confirm the ability to pay for it. Remember, the best rule of thumb for any remodeling project after determining a detailed budget is to add a 20 percent contingency to allow for unforeseen expenses. Keep in mind that estimates obtained online or from other sources are a good starting point but, before committing to any final budget, solicit bids from local NAHB-approved contractors for accurate comparisons.
An important aspect of any remodel is the impact to your living conditions. Consider whether your contractor will be able to work in isolated areas thus allowing you to continue occupying the home. If you find it would be better to be out of the home during construction, be sure to include the costs of temporary relocation in your budget including meals and transportation.
Before finalizing the budget and securing the funds necessary, be sure to investigate any local, regional, statewide or federal programs available to encourage upgrades and remodeling. Check with utility providers such as your local water district, Southern California Edison (www.SCE.com) or The Gas Company (www.SoCalGas.com) who may offer programs for upgrading appliances to more energy efficient versions or updating interior and exterior improvements. Check with the Federal Housing Administration (FHA) which often offers programs for home improvements at www.HUD.gov and search for information on Title I and 203(k) programs.
The best source of capital for this project is cash but, because remodels often add value to the home, be sure to look into any public or private loan programs with which you can avail yourself of the equity already existing in the home, such as Home Equity Lines of Credit (HELOCs), home equity loans (second mortgages) or a cash-out refinancing of your current mortgage. Consult with your financial planner, banker or a trusted mortgage broker to ensure you are using the best possible financing mechanism for your specific circumstances.
The results of the remodel can be a great source of pride or a bitter and painful memory. To increase the likelihood of pride rather than pain, when making any important decision, think to yourself W.W.B.V.D. [What Would Bob Vila Do], and that should keep you on the right track.
For more information on remodeling, home buying or the benefits of homeownership, visit our www.BIABUILD.com or www.NAHB.com/remodel websites.