This is an interesting question. Many times when we buy a new home, especially one that is either older or previously occupied, we are anxious to get inside and make it our own. While it is tempting to put our own personal stamp on a home renovation, there are a few things you should consider before leaping into a renovation project.
Study the comparable homes for sale or that recently sold in the area- Why? From an investment standpoint this is a good idea, because the homes in the area and their value and/or level of updates impact your home's market value. You can usually do this by going on a real estate site, or Zillow.com and seeing what homes in your area are selling for. The added benefit is most listings have pictures of each room, and this can give you an idea of what updates many of them have. Why is this important? Well again, speaking from an investment side, if the most costly home in your area has laminate counter tops in the kitchen, and used appliances, and this is a recurring theme in the area, you may want to opt for high grade laminate as opposed to more high end choices. There is such a thing as over improving for the neighborhood and this translates to not getting back a full return on your investment in your renovation. Now if you plan on staying in the home for the next ten years or so, get the granite. If you aren't sure or feel you are going to move again in 5 years, stick with an upgrade that is more modest. You'll like not lose money. This goes for other big ticket items as well, such as hardwood flooring, high end appliances, and bathroom updates. The general rule of thumb if you are staying in the home under five years, go for the next best upgrade, if over five years renovate according to your needs and as budget allows. Many times neighborhoods will catch up to your renovations if given enough time.
Live in the home for a while- While it is tempting to start knocking down walls, ripping out cabinets and tearing out vanities, you may be better served to wait a few months. Many times we aren't sure what our needs are or if they will change. Sometimes an unexpected pregnancy can call for that extra space or you find the home needs other things that aren't cosmetic that are critical. There's sometimes unexpected expenses that crop up too that were not caught during a home inspection, depending on what time of year you bought your home, you may not even be aware say, that the air conditioner was broken or the heater was in bad shape. No matter what the reason, nothing is a better indicator of what is needed in a new home like living in one for a while and making sure what money you may have, is spent in the best possible way.
Prioritize your needs- We may want granite, we may want hardwoods, we may want lavish fixtures, lighting and furniture, but realistically speaking, the money that will be best spent upfront is things that can save you money in the long run. In some cases, that may be replacing windows with more energy efficient ones, or replacing older furnaces, air conditioning units, or plumbing. Many older homes have hidden issues that may add to your monthly mortgage via a higher water bill, and/or a higher electrical bill. Taking care of these hidden issues up front will assure you that the most important updates that save you money will be addressed ahead of time. You may not be able to see where the money was spent but your wallet may be the best indicator of money well spent. By saving more money on energy efficiency, you'll no doubt have more money to spend on the fun decorative side of fixing up your home.
For more on home decorating, design and renovation, see: Dawn's Interior Decorating Solutions