How can you remodel in a recession?

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Home Improvement

Although it may seem counterintuitive, a poor economy could be an ideal time to renovate your home and find the best deals. See more home design pictures.
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In recent years, many homeowners purchased what they thought would be their starting home. They would live in it for a while, allowing it to appreciate in value, and then sell it for a profit to upgrade to their “forever” home. Sometimes, the starter home would receive a few upgrades to boost its value, while other times it would be left as-is. However, the real estate bubble burst in 2007 and 2008, putting many homeowners in a difficult situation. Suddenly, it was no longer feasible to sell their homes at the highest price for a substantial profit.

During the housing boom, contractors and builders were busy with new construction projects. When the economy took a downturn, however, demand decreased, home loans became scarce, and builders were left with an excess of vacant homes. Spending on home improvement reached its peak in 2006, according to the Joint Center for Housing Studies at Harvard University, and dropped during each quarter thereafter. The center predicts a 12.1 percent annual decline in home renovations by the third quarter of 2009 [source: Harvard].

One effect of the housing market’s crisis is that people are staying in their homes for longer periods. A recession is an opportune time to renovate that starter home, as contractors are out of work and materials are becoming more affordable, so long as the project adds value to your home for a minimal investment. Undertaking a few fix-up jobs around your house allows you to enjoy your home more until the market improves and adds value to your home in the process.

 

Why Remodel in a Recession?

When times are tough, travel and entertainment expenses are often the first to go in a family budget. This has led to the emergence of a new kind of vacation known as a “staycation.” Instead of renting a waterfront property, you take time off work and vacation at home. This presents an excellent opportunity to enhance your most valuable asset: your home. Not only will this provide enjoyment for your family, but it will also pay off when you decide to sell.

Another reason to remodel during a recession is the availability of excellent contractors. During the housing boom, your chosen contractor may not have been available within your timeframe. However, in 2008, new construction projects declined sharply, and contractors with six-month waiting lists suddenly became more accessible. As things slow down, the subpar contractors are typically weeded out, increasing your likelihood of obtaining a quality crew when times are tough. Additionally, sought-after contractors offer more competitive rates to secure work and keep their crews busy since supply surpasses demand.

Going the do-it-yourself (DIY) route is another excellent option during a recession. Most of the expenses associated with contractor budgets are labor costs, so if you choose to take on projects yourself, you can save a lot of money. Combine that with the fact that building materials are discounted during a recession, and a DIY-er can save even more. Keep an eye out for sales at your local building supplier.

Affordable Home Upgrades


If you’re on a budget, don’t worry, there are still ways to upgrade your home without breaking the bank.
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Painting is a cost-effective way to give a room a fresh look. A gallon of paint costs less than a restaurant meal and lasts much longer. A new coat of paint in cool blue can immediately transform the mood of your living room. Ensure that the paint colors you choose in each room complement the overall aesthetic of your home.

If you can’t afford a full landscaping project, planting flowers is a great way to enhance the exterior of your house. You can purchase small packs of annuals early in the season for a fraction of the cost of full-grown plants. Bulbs are also inexpensive and easy to care for, and many provide delightful ranges of color year after year. You can even start seeds early in the season and transplant them to your yard once the weather warms up.

Bathroom renovations are in high demand because they’re one of the main things that buyers look for when purchasing a house. If you have an outdated bathroom, you can make several affordable improvements to bring it up to date. Updating your tile is affordable, and it’s usually a project that a novice renovator can complete successfully. New vanities can be costly, so you might want to consider retrofitting an old nightstand or dresser with a sink. This kind of customization is desirable to buyers and kind to your wallet.

Kitchens are another area of focus for buyers. Replacing cabinets can be a huge job, but refacing or painting them is a great way to make a change without spending too much. If you do want to replace your cabinets, you might want to consider open shelving, which is popular in design magazines and less expensive than new cabinets. Replacing the hardware and drawer pulls is an affordable way to update the look. Granite countertops are highly desirable in kitchens, but they can be expensive. However, installing granite tiles with a complementary grout color can provide a custom countertop.

Tips for Finding Affordable Renovation Deals

The key to a profitable renovation is finding the best deals for your investment. Fortunately, there are many deals available, even in a weak economy. You just need to know where to look. Most towns and cities have home supply liquidation stores that sell overstock and lightly used items at a big discount. Windows, doors, molding, drywall, vanities, and kitchen islands can all be purchased for a fraction of the price you’d pay at a big-box store.

Having the right tools is also crucial. You don’t want to use a handsaw for a job that requires a circular saw. If you don’t have a set of tools, many hardware stores offer tool rentals and advice on how to use them. If you want to tackle bigger home projects, consider buying major tools, but if it’s a job that requires a specialty tool, then renting is the way to go.

Big-box retailers offer free classes for home renovation projects, including tiling, wood flooring, drywall hanging, and fence building. TV shows aimed at DIY enthusiasts also provide helpful tips for homeowners. You can save money by buying used materials from salvage yards, flea markets, and garage sales. DIY enthusiasts also leave reusable materials on the street. The Internet is another excellent resource for finding used materials through eBay, Craigslist, and Freecycle. You can also find affordable handymen, plumbers, and electricians on Craigslist, but make sure to check their licenses and references. If you’re ready to upgrade your home, check out the links on the next page for more information. The page also includes related articles on skylights, flooded houses, daylighting devices, Integrity Block, and ceramic tile production.

The following is a list of articles related to renovating and remodeling during a recession. These articles discuss the benefits and opportunities that exist for homeowners and contractors during tough economic times. They include tips for capitalizing on capitalism, taking advantage of tax credits, and making inexpensive renovations. Additionally, they explore how the DIY industry has cashed in on the recession and how architects are urging people to get out and renovate. The articles also touch on how the renovation industry may benefit the most from the budget and provide reasons for why remodeling is a good idea during a recession.

FAQ

1. What are some cost-effective ways to renovate my home during a recession?

One of the most cost-effective ways to renovate your home during a recession is to focus on small, cosmetic changes. This can include painting walls, updating light fixtures, and replacing cabinet hardware. Another option is to repurpose items you already have in your home, such as turning an old dresser into a bathroom vanity or using old doors as a headboard. DIY projects can also save money, but be sure to properly research and plan before starting any major projects.

2. Should I hire a contractor or do it myself?

This ultimately depends on your level of expertise and the scope of the renovation. If you have experience with DIY projects and feel confident in your abilities, you may be able to save money by doing the work yourself. However, if you are unsure or the job is more complex, it may be worth hiring a contractor. Be sure to get multiple quotes and check references to ensure you are getting a fair price and quality work.

3. How can I finance a renovation during a recession?

If you are unable to pay for a renovation out of pocket, there are several financing options available. One option is to take out a personal loan from a bank or credit union. Another option is to use a credit card with a 0% interest introductory period. Some home improvement stores also offer financing options for larger purchases. Be sure to carefully review the terms and interest rates before committing to any financing option.

4. What are some renovations that can increase the value of my home?

Renovations that can increase the value of your home vary depending on your location and the current market. However, some universally popular renovations include updating kitchens and bathrooms, adding a deck or patio, and increasing energy efficiency with new windows or insulation. It’s important to keep in mind that not all renovations will increase the value of your home, so be sure to do your research before investing in a major project.

5. What should I prioritize when renovating during a recession?

When renovating during a recession, it’s important to prioritize projects that will increase the functionality and comfort of your home. This can include basic maintenance and repairs, such as fixing leaky faucets or replacing worn-out carpet. Upgrading to energy-efficient appliances or windows can also save money in the long run. It’s important to avoid over-investing in projects that may not recoup their cost, such as adding a swimming pool or extravagant landscaping.

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