SHOULD I DELAY HOME RENOVATIONS DUE TO THE COVID-19 CRISIS?
Given the uncertainty surrounding the coming months, many homeowners may be wondering whether it’s still a good idea to continue with their home renovation plans.
If only it was as easy as a simple yes or no. But as with many things in life, it depends on a number of factors which we will delve into in this week’s blog post.
So read on below and see some of the things you should consider when deciding whether you should proceed (or not) with your planned project in these uncertain times.
WHAT ARE YOUR RENOVATION PLANS AND HOW ARE YOU FUNDING THEM?
If you’re thinking about smaller scale projects, i.e. new bathroom/kitchen, or putting in a new deck, that you aren’t funding through a loan or extending your mortgage, then these are the projects you probably don’t need to put off.
However, if you’re considering a larger project, eg a large extension to your home, that needs to be funded through a loan, then it may be wise to put a bit more thought into potential changes in the economy over the next 6-12 months, and other factors such as your own job security.
With the current low interest rates, however, now is a great time to borrow money and increase the value of your home, which is the end goal of every major renovation project.
WHAT STAGE ARE YOU AT ON YOUR RENOVATION JOURNEY?
Thinking About Starting Your Renovation In the Near Future
The lockdown has, by its nature, allowed people time to actually live in their houses, and find out the parts that don’t work well, the parts that do, and the parts that given the chance, we would ideally change or renovate.
The good news is the concept design phase, which can take between 2-4 months, is a relatively inexpensive exercise, with your time being the biggest “expense” at this stage.
You can reassess how the economy is fairing at the end of this process, before deciding whether to push ahead with your plans. This is also a great time to have talks with your bank or lender, to find out what you may be able to borrow if you were to go ahead.
Middle of Planning Your Renovation
This is an interesting stage, as there are actually a few sub-stages within this category, namely:
- Ready to move from concept to building consent drawings
- Ready to submit building consent drawings
- Plans are already in council
While each sub-stage in this category is at a slightly different point in the pre-construction process, the all share a key similarity, in that they all still require time for each stage to progress.
This means that even if you choose to push ahead and move to the next stage, you have the ability to pause if in a few months your circumstances have changed and you can no longer proceed with the project.
By now you’ve already spent months planning your renovation, the building consent has been issued, the funds are approved, and your builder has given you a quote – you’re almost ready to start construction.
There are both pros and cons about this situation. You have invested a lot of time and money to get to this stage, so you need to carefully consider your next move.
You may find that other homeowners get cold feet or find their circumstances don’t allow for it so pull out of their projects, freeing up capacity of subcontractors and suppliers in the short term.
You are also in a great position to take advantage of the all-time record low interest rates, so it might be a great time to get your construction completed and lock those great rates in.
You are also one of the lucky ones and already have some clarity around your build costs.
One factor to consider if you are leaning towards delaying your project is that the prices of many building products and materials may go up in the coming months if local manufacturing or imports into the country are held up, it could therefore be wise to sign your builder up now and get key product ordered.
What decision to make?
To summarize here is a list of the key factors you should consider when weighing up whether to continue pressing on with your project or putting in hold for a while:
· Financing – whether you have the capital to complete yourself or require assistance
· Personal factors - whether job security or continuity of work could prove to be a potential issue
· What stage you are at in the process – earlier on in a project you have the benefit of time on your side to continue to make decisions
· Costs – think about the costs you have already committed to the project and consider whether there may be any additional ones if you choose to delay
· Speak with your builder – your builder will have a lot of industry knowledge to help you understand what is going on, for example whether supply of products could be a foreseeable issue
· The overall outcome – you don’t want to compromise on what you are wanting to achieve by deciding to complete a project before you have all your ducks in a row.
If you are looking at getting a bathroom/kitchen or small renovation off the ground over the coming months but don’t know where to start, then get in touch with our team on 09-218-5255, or firstname.lastname@example.org., for a no obligation initial concept meeting.