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Are Home Remodeling Projects Financially Risky?

When it comes down to it, home remodeling is really all about dreams. We dream of a better lifestyle for ourselves and our families, and we dream of a higher market value for our homes. Investing money in home remodeling projects is a way of realizing these dreams and making them a reality. That is why there are so many blogs, websites, videos, and TV shows dedicated to home remodeling. It is something we can all relate to as homeowners and as people chasing our dreams.

When things go well, of course, we are thrilled. We have planned our remodeling project and budgeted carefully. We have taken our time to choose the very best contractor in our area, and have given our project every chance at success. The preparation goes smoothly, and the remodeling work is completed without many complications. The final result meets or exceeds our expectations, and we enjoy the outcome right away. Time passes and nothing goes wrong with the renovation — the quality of the work is sound.

This is the ideal scenario, and it’s what we all hope for. Unfortunately, it’s not always the reality we experience. Sometimes homeowners get in over their heads in terms of remodeling. Sometimes they choose the wrong contractor, or they don’t put enough time and effort into planning the project before they get started.

Is it even possible to choose the “wrong” project? Perhaps not — but it’s certainly true that some home remodeling projects carry more risk than others. It’s also true that your needs and goals will affect the level of risk you’re willing to take.

For example, if your goal is to sell the home as quickly as possible, sinking a huge amount of money into one area of the home (e.g. the kitchen) may not be a good scenario. There may be structural issues that need to be resolved instead, such as new siding or roofing. People often go for “glamorous” renovations at the expense of doing things that really need to be done. The idea is that a brand new kitchen or bathroom will add value to the home — and this is true. But if selling is your goal, it’s important to have your priorities straight.

If enhancing your lifestyle is the goal, you may have a different set of priorities. That dream kitchen may be totally worthwhile, even if the price tag is high. But you’re still carrying a high degree of risk. What if the result isn’t what you’d hoped for? What if you decide to do things differently half way through the process? These are all important questions and scenarios to consider before you start the remodeling process.

Making the most of your remodeling investment

Home remodeling is really an investment, and when you hire a contractor to perform this kind of work, you are choosing a partner in your investment. In a perfect world, the contractor wins because they get a contract, a new client, and a new chance to prove their skill and professionalism in home remodeling. The client wins because they get a remodeling job that’s on budget and beyond expectations. If you want this to be your scenario, take extra care when hiring a contractor for your job, and err on the side of too much planning, rather than not enough!