I'm considering borrowing money for some renovations in my home, but I'd love to get your thoughts on whether that's a good idea. We're not handy at all, so we'll definitely be hiring professionals. We plan to stay here for at least another three years, but our future beyond that is unclear. The renovations we're thinking about include new flooring, trim/baseboards, and possibly painting our cabinets. Are renovations worth the investment, especially given our uncertain timeline?
2 Answers
Borrowing for renovations can sometimes be worth it, especially if you plan to stay for a while. Home equity loans are an option and can even be tax-deductible. Just keep in mind that renovations usually don’t give you back all the money you put in, typically around 30-60% when you sell. So if you’re expecting to make a profit, be cautious about spending too much upfront.
It depends on what you’re looking to achieve. Small updates might increase your home's value without too much outlay, but if you’re making big cosmetic changes, be aware that they may not fully pay off. Also, consider the interest rate on any borrowed amount. If it’s low, borrowing could retain more cash for other investments or expenses. Just make sure you can handle repayments if necessary!
Thanks! This really clarifies things! I’ll definitely weigh all these factors.