Is Your Home Renovation a Complete Debt Trap?

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You want to live in your dream home, but making those dreams come true costs a lot of money. Before you start picking out tiles and imagining new cabinets, you have to ask yourself whether your renovation plans are going to plunge you deep into debt.

Renovations Are Common Debt Traps

Going overboard with renovation costs isn’t a rare problem. According to an Ipsos survey, 43% of owners admitted that they would go into debt to finance their projects and that the debt would take them approximately 2.5 years to finish paying off. The estimate of repayment doesn’t consider any of the previous debts sitting on top of this. So, it’s fair to say that tackling the amount could take much longer.

If you’ve sunk yourself into a debt trap, you should go to David Sklar & Associates and book a consultation with one of their licensed insolvency trustees. They will assess your situation and determine what steps you can take to get out of debt, whether it’s credit counselling, budgeting, a consumer proposal or personal bankruptcy.

However, if you haven’t completed your renovations just yet, you can find ways to save money and circumvent major financial problems. Here are three things that you can do ahead of time:

1. Learn the Real Costs

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Underestimating the costs is one of the most popular home renovation mistakes that owners make when they’re planning their budget. They calculate the initial costs of the projects but don’t consider factors like taxes, shipping fees and permits.

When you’re compiling your budget, you need to research the average costs of these projects ahead of time. You’ll be shocked that run-of-the-mill improvements can eat up thousands of dollars of your budget.

2. Give Your Budget Some Wiggle Room

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You’ve seen it on those home renovation shows. One minute, the renovation is right on schedule and on budget, and the next minute, the contractors pull off a panel and find a heap of black mold or evidence of an unsafe electrical job. Now, the owners will have to extend the renovation time, double the costs and amplify their stress to get the results they want.

You always have to leave wiggle room in your budget to account for hidden renovation costs like previous code violations, pest removal and water damage. Don’t get caught by surprise. Adding a comfortable buffer will make sure that you don’t go over-budget at the first sign of a problem.

3. Avoid Projects That Are Wastes of Money

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Not all projects are created equal. Some will be well worth the costs and add value to your property. Some will be absolute money pits that will make you wonder why you ever bothered in the first place. Projects like in-ground swimming pools, hot tubs, luxury bathroom fixtures and sunrooms are better when they’re left in your daydreams.

A good home renovation won’t come cheap, but it doesn’t have to cost you a fortune. As long as you take the right precautions, you should manage to get through the experience with a refreshed house and an undamaged bank account.

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