Have you been renovating your home for so long that you don’t even know when it will ever end? Just when you thought you hired the right contractor, another problem comes around every time like they don’t seem to know what they’re doing at all.
Is your Home Becoming a Money Pit?
Renovating a home can potentially amp up your property’s resale value. However, what most people fail to consider is that this only holds true when your remodeling expenses don’t exceed the projected equity of your home after repair. Otherwise, you’ll be serving a huge financial loss instead of a bottle-popping celebration.
So here’s what you need to do:
- Audit your expenses and see where the biggest problem is
- Seek a third party opinion on your renovation problem
- Revisit your budget and see if you can still handle the costs
- Stop all the work and consider other options like selling the house
How Much Have You Spent to Fix Your Home?
If you’ve felt that your home has become a money pit, your problem area is most likely something that’s very difficult or complex to fix. In real estate, foundational and structural components are the most expensive parts to work on and the most difficult projects one can undertake. This is because fixing foundations, pillars, walls, etc., can require heavy equipment. And you have to know that the contractors also have to address all the underlying causes of the damage, so we’re not just talking about one (1) type of construction work.
They can also take longer to fix, especially when they’re underground — the contractors have to dig without compromising the surroundings that support the house. According to Home Advisor, the national cost average of repairing foundations is around $4,542. Minor cracks cost around $500, while larger issues that need heavy equipment can cost you tens of thousands more.
So take a look at your financial report. How much have you spent overall on the repairs? Do you think the expenses, backlogs, and issues experienced are reasonable? Or are you just wasting money? Because it might be better to accept a loss now than incur more in the future.
How Many Opportunities Have You Lost Because of It?
Smart investors know when losses are not worth it anymore. They know when it’s better to allocate the money to other investment opportunities instead of waiting in the wind. But of course, we understand that you might have more personal reasons as to why you waited this long, like the home being your family’s pit of memories.
For many homeowners, home repairs meant that they had to forego other expenses. They had to sacrifice a lot of things for the time being because they hoped the repairs were going to be worth it in the end. So our questions for you are:
- What things and experiences have you sacrificed to have some budget for your home renovation? And;
- What do you think are the things and experiences that you will have to sacrifice just to continue with the renovation?
Remember that every decision has an opportunity cost. It could be not being able to sell your home at a higher resale value, not being able to spend family time as comfortably and as safe, or not being able to support your family financially as much because everything is going to the project. It’s up to you whether the opportunity cost is worth it or not.
What Are The Chances That Your Renovations Will Be Completed?
Take, for example, you hired a good contractor. He assesses your property, lays out a game plan, and tells you what you can expect throughout the project, giving you an optimistic sense. Then a week before the target date of completion, he says, the weather got bad, the conditions weren’t as stable as he thought they would, and they’d need another month or two to complete everything.
Then again, after that month or two, he again says they need more time without giving you a guarantee. Some contractors do that. That’s why it’s best to hire people who charge a fixed rate.
If this is what’s happening to you, ask yourself this:
- How well do you think the contractor is handling the project?
- How far are they from finishing the work?
- How is their workmanship?
- Do you think the reasons surrounding the delay are acceptable?
If most of your answers lean towards the negative, then we agree, that it’s time to move on.
How to get out of a money pit house?
Don’t be sad too much. You didn’t waste your money even if the renovation works aren’t done. You can think about buying another home nearby and selling your home to a cash buyer like us at Spire Property Solutions.
At Spire, we help homeowners solve their property issues in a very stress-free way. Learn more about our services, and let us help you out of that money pit once and for all. Call us now at (678) 318 – 1801.