Some people find home renovations exciting, while others find it daunting. No matter your feelings on this topic, your house will likely require at least one renovation while living there and to ensure a smooth experience, it is crucial to have a plan. Here are five things to consider before you start any home improvement project.

1. Why do you want to renovate?

Are you renovating for your own enjoyment, or are you planning to sell in the near future and want to generate maximum return on your investment? Your answer to this question will influence almost every decision you make before and during your renovation.

2. Is it a cosmetic or structural renovation?

Decide if you will be making esthetic changes like updating the flooring or replacing kitchen countertops, or if you will be taking on structural adjustments like removing walls. Making any significant changes that alter the structure of your home like moving a wall or adding a basement apartment will require a permit. This includes additions, decks, garages and changes to plumbing systems. You will need to plan for the time and cost to obtain planning and building approvals.

3. What is your budget?

Your budget will dictate the type, quality and length of your renovation. Planning out how much money you have to spend on this project will help decide what can be improved. To manage your renovation costs, first decide on your must-have items – then determine what you're willing to compromise on and where you can spend less. A good tip is to allow a buffer of at least 10% to ensure that you are covered for unexpected costs.

4. What is the potential Return on Investment (ROI)?

You need to consider if the cost and time of renovating are worth your efforts. If you are planning on staying in your newly renovated home for a long time, make sure these improvements are changing your quality of life for the better. If you are planning on selling your home in the near future, you should consider if the renovation will increase the value of your property. It may be helpful to meet with a realtor to determine what upgrades will have the most impact on your home’s market price.

5. How are you going to pay?

After you decide on your renovation project and budget, one of the biggest decisions is determining how you're going to pay for the project. Here are a few options to consider:

• Savings – Depending on your savings amount, this method mainly works for smaller projects and may not be feasible for more costly ones such as a new deck or an addition.

• Loan – A loan can be an excellent option to finance your project. Personal loans can be used for just about anything, including home improvements. Many financial institutions offer loans specifically designed for Home Renovation, where homeowners can borrow an amount based on the future value of their property after the improvements are made. CUA provides a Home Renovation Loan, with rates starting at 5.79%.

• Home equity line of credit – Homeowners with enough equity can opt for a Home Equity Line of Credit (HELOC). The lender uses your home as security in the event you default on the loan. CUA's HELOC can provide you with up to 80% of the appraised value of your home. This is a significant benefit to CUA members since banks are limited to lending home equity at a maximum of 65% of your home's appraised value.

A home renovation can improve homeowners' quality of life; however, it requires careful planning to ensure that the project does not jeopardize your future financial goals. If you are interested in discussing your next home renovation, a member of the CUA team would be more than happy to chat with you. Give us a call at 902.492.6500 or email us at info@cua.com

Revised Oct. 6, 2021