Want to have the perfect home? It might be time to break out the piggy bank since Americans estimate it would take an average $18,747.35 to turn their house into a dream home.
A study examining home renovations asked 2,000 Americans to rank what came at the top of their renovation wish list.
The results found that fresh paint, new floors, a modern bathroom, updated outdoor space and bigger kitchen all ranked in the top five when people were asked what they’d most like to change.
Even what starts out as a little tweak can soon turn into a massive project since the average renovation goes $5,486.60 over budget. Seven in 10 use money they’ve saved to fund their renovation while 35 percent break out the credit card and one in five opened a home equity loan.
The research conducted by OnePoll on behalf of Figure also found that people have spent $19,998.15 on updates to their current house and nearly one in five admitted that they used the wrong source of funds to make it happen.
That was just one thing past renovators plan on doing differently the next time around. Budget for unknown expenses (36 percent), do more DIY (34 percent) and research a contractor better (33 percent) were all goals for future home updates.
Almost three in 10 people wish they had thought more about how their renovations would affect the resale value of their house, which isn’t surprising seeing as the average American estimates that their updates add $17,332.04 in home value.
Even with that additional value, people still admitted that there were struggles with previous renovations and 33 percent revealed that they did something wrong.
Materials costing more than anticipated came in at the top of the list of things gone awry with 42 percent. Labor costing more than expected (39 percent) and the discovering of an underlying problem with the house (35 percent) rounded out the top three.
Other major issues home renovators faced included weather delays, hiring the wrong contractor, going over schedule and regretting design choices.
John Sweeney, Head of Wealth and Asset Management at Figure said:
“Renovation surprises are increasingly the norm, so build a 15% cushion into your budget from the start. Then stick to it, making the necessary compromises by selecting lower-cost materials, taking on a few DIY projects yourself, or scaling back the design. Another tip: go with a fixed-rate loan so you know exactly what your monthly payment will be and can ensure it fits with your budget.”
Americans have poured a lot of money into their houses. Survey takers estimated that they had spent an average of $19,998.15 on updates to their current home.
The mission to create the perfect dream is far from dead since 45 percent plan to take on a new renovation project in the next 12 months.
Three in five are hoping to give their space a new look while 44 percent want this renovation to increase the value of their property, which makes sense since one in four are looking to appeal to future home buyers with their changes.
The bathroom and kitchen are at the top of Americans’ renovation plans with bedrooms and the living area not far behind.
Sweeney concluded:
“Homeowners invest a lot of time and energy in their renovation dreams but little in how to finance them. Most end up paying too much, using relatively expensive credit cards and personal loans. Plan ahead and evaluate your options, particularly home equity products as your equity typically earns you a better rate and the potential to deduct the interest from your taxes. You should consult a tax advisor regarding the deductibility of interest and charges.”
