Before & After Renovations

How To Renovate Your House (Without Having Loads of Cash Laying Around)

Aarrrrrrgh

OK, so yesterday’s conversation under my bathroom renovation post was a little frustrating – you can read it here, if you’re interested – but at it’s heart was, I think, a solid question:

How in the world does one afford to renovate a house if, say, one has not found themselves the sudden recipient of a trust fund/inheritance/other random windfall of enormous proportions?

The reason I say it’s a good question is because I’ve had it myself. About a year and a half ago, I noticed that my friend Erin was doing bunches of renovations to her place – including yard landscaping (and hardscaping, which costs a fortune), an exterior makeover, and so forth. Because I know the general feeling is that it’s rude to ask someone how they can afford a big purchase, I tried not to, but finally I couldn’t help it.

Check out all my before and after home renovation projects

“Erin,” I said, “I know this isn’t a question I’m supposed to ask…but…but…how are you doing this?”

She explained how she’d done it. And then I took her suggestions, and I did it myself. If you check out this post, it’ll tell you everything I know about home equity lines of credit – and below are a few more tips I’ve gleaned from having been in the process of renovating my house for well over a year now (three years, if you include the renovations I did right when we moved in).

I made the mistakes, so now you don’t have to.

how to renovate your house on a budget

Check out my garage-to-multifunctional-living-space renovation here

  • Do not do everything at once. I made this mistake, because I enjoy multitasking and am very, very impatient: I started bathroom #2 before bathroom #1 was anywhere close to done, and there are still some details left to fix in the garage.
  • Put together a manageable scope of work with the contractor, and review daily to make sure you’re on track both with budget and timing – it’s not about micromanaging the people, but rather choosing the right people for the job, and then managing the project.
  • Also, you will go over budget and it will take more time than you want it to. Just know that, and prepare for it.

free casement window from deconstruction house

  • For products, think outside of the box: I hunted around on CraigsList for people who may be trying to offload construction supplies (like the casement window I put in the garage studio, pictured above; that was free from a deconstruction house I found). Also consider contractor’s warehouses – they don’t necessarily have as much stuff as, say, a Lowe’s – but what they do have will be the same quality for a much lower price (I found my front door at a warehouse in Santa Clara for about $1.5k less than the exact same door at Home Depot).
  • Negotiate a low “teaser rate”…but plan ahead for refinancing. The last thing you want is for your HELOC to all of a sudden be subject to a variable interest rate, because that’s when things can get crazy expensive (and unpredictable, which is no fun when it comes to matters of money). Talk to your mortgage broker about what you’ll need to have in place in order to refinance, so that you can be ready when the time comes. You may, for example, need to have X amount of cash in the bank, or, if you’re a freelancer, be able to show two years of income that qualifies you for the new loan. And so on. Get those ducks in a row.

mint green hex starburst tile

  • DIY what you can – but be realistic about it. Take the mint-green hex tiles in the master bathroom (pictured above), for example: I had helped my friend tile her bathroom walls, so I figured I’d be capable of installing the encaustic cement tile in my bathroom floor. Ah…no. Turns out that tiling a flat, completely even wall and tiling a less-than-smooth floor are totally different beasts, and how this ended was with me wrecking a whole bunch of very expensive tile (and then having to pay someone to hack it out, because I tried – hard, using everything from a crowbar to  – and turned out to simply be beyond my physical abilities).

Any other questions? Ideas? Tips of your own?

  • sara watson

    Super interesting! It seems like you are in charge of most renovations but do other members of your family chime in? is it stressful to live amid construction?

    • jordanreid

      Since it’s sort of what I *do* – and I consider it an investment in terms of my business and time – I tend to take the reins on most of the improvements – although of course K’s taste, needs, etc are of huge importance (e.g. the music studio that we put in the garage).

      and re: stress – it should be, and it’s definitely, you know, annoying to have one toilet for awhile, or a few days with no functional shower, but I kind of personally thrive on it, and since I work from home I enjoy having people around and being intimately involved in the process.

  • smalina

    I am curious about the HELOC.. I know typically (and post recession/housing market crash) these are seen as risky, bc you are spending money that only exists theoretically, so if the housing market changes you are in big trouble… it also feels risky bc in it gives you the illusion of spending free money but it’s really just a loss that you won’t feel until you sell the house and then end up with much less equity than you otherwise would have had to buy your next home. And of course variable rate mortgages can send people into foreclosure if you don’t have a *very* flexible monthly budget (ie lots of extra cash at the end of every month). I have thought about using a HELOC for a big renovation of ours, but these risks concern me. So I’m wondering, how did you go about thinking about all the financial considerations?

    • jordanreid

      I found that the big downside for me was, indeed, that even though I set a budget, I went over it because it only increased my payments by tiny increments to do so, so yes, it did feel to some extent like “free money.” That said, since the market here is very, very strong – and I keep a constant eye on it – and am open to moving – I felt (and feel) confident that the improvements will net a profit. I think it depends on the specifics of your situation – the market in your area, and also whether you could (or would want to) move if the market started to drop and you wanted to ensure that your investment reaps a profit.

      And re: the variable interest rate, that’s a major concern – so personally, my intention was always to refinance and roll the HELOC into our first mortgage (which has a fixed interest rate) by the end of the year, when the teaser rate expires. I didn’t plan ahead for the fact that refinances require you to have a significant amount of cash on hand, and so that was a mistake I made – I’ll have to figure out a way to liquidate some assets to have enough cash in the bank to do this by EOY, unless, of course, we end up selling.

  • Jenn

    I am planning to take this step next year, and you’ve been super helpful about the process! I was pretty cash poor after my down payment so I’ve lived with what I didn’t like for a long time. I haven’t even painted!
    I’m very nervous because I need to redo a lot – kitchen, bathroom, downstairs floors, stairs, one bedroom floor, paint, moulding…luckily my house is just over 750 square feet so it’s almost tiny, and I think it will be manageable in stages. Anyway I’m sure I will be googling the shit outta these posts next year. Thank you!

  • Beasliee

    I love reading your renovation content. As a children / teen, my parents were always redoing rooms in our home in never-ending rotation.
    However, as an adult, I bought a relatively new apartment and have just moved into another relatively new apartment and thankfully they are fine as they are because I just CANNOT get excited about decorating.
    The gusto you launch into these projects with – I just can’t imagine that level of enthusiasm!
    Enjoy your soaking! 🙂