The (Eventual) Value of DIY is the third and final post in our 3-part series about do-it-yourself (DIY) renovation assumptions. The first 2 posts tackled assumptions about time and money. This post considers the assumption DIY adds value to your home and life.
Renovations are usually started because you need a change. Perhaps better function, maybe updating the space, or even adding a suite for income. We assume that this improvement will add value (equity) to our home and believe that it will make our lives better. While both of these may be true, we need to be realistic about when the value of DIY will be realized and the process to get there.
Return On Investment
In theory, you should be increasing the value of your house when you renovate. The extent of this, though, may not be as much as you think. This is an area that requires research because you usually don’t recoup your renovation costs dollar for dollar. There are some online estimates you can use to find how much your reno will add to the value of your home. This is also referred to as Return On Investment (ROI), which is an estimated percentage of how much will you gain compared to how much you spent. This may be more favorable IF you save costs with DIY. Also remember, it’s important to keep these estimates in context. I.E. If you indulge on extravagant appliances or luxury materials you likely won’t get back even close to what you paid.
To help with this, you can also ask a realtor their opinion about what renovations will increase the value of your home versus what you can skip. As well, realtors should be able to give you an idea of the calibre of renovation to consider. For example, if you aren’t in a high-end area, you probably don’t want to add granite counter tops, real hard wood flooring or expensive light fixtures. There is a maximum amount that your home’s value can increase. Knowing this before your renovation is key to maximizing your return on investment.
Eventual Increased Value of DIY
Knowing the ROI on the renovation you are doing is helpful but remember that the renovation doesn’t yield profit right away. It should eventually add value; however, the increase isn’t realized until you sell your home or borrow against the equity. While the value of your home may rise, it’s not the same as having cash in your wallet.
The exception to this is a rental suite that will be generating income. Although, it will take some time before the income generated will cover the renovation costs. This is another area you want to be careful spending because you can’t charge exponentially higher rent just because you have superior finishing.
Unless you’re flipping, it takes time to access the added value of the renovation.
Your Well Being
The above value considerations apply whether you DIY or hire someone. Therefore, the crux of adding value through DIY comes down to your quality of life. Renovating can be an overwhelming process. Even more so when you are doing the work. It can be frustrating, expensive and all-consuming. Not only does this affect you individually, it also has a huge impact on your relationship (keep reading this blog for tips on renovating as a couple). Are you prepared for this until the renovation is done? Conversely, is the stress of the renovation worth it in the long run to achieve the change you need/want?
Lastly, how will you feel if you notice a mistake? Speaking from experience, we decided to DIY tiling the back splash in our kitchen. We love the result and it really dressed up the space. BUT (of course there’s a but), I notice a few mistakes that we made near the end when we were tired and rushing. These bother me more than Sean and no one notices them unless we point it out. Eventually, I’ll stop noticing it too, but for now, my Inner Critic’s keen eye sees it every time I look at it. Every. Single. Damn. Time.
Like I said, I know I will stop seeing it but right now it irritates me. We made a mistake and now we have to live with it. Granted, you’re not guaranteed a perfect job just because you hire someone but at least you aren’t upset with yourself.
In considering taking on a DIY renovation, consideration of the value of DIY is essential: both financially and quality of life. To start, we recommend choosing projects you are confident doing and know you can do well. Then, if you enjoy the process and challenge, you may want to take on more advanced jobs. In the mean time, hire a professional as needed, knowing that you are saving in the long run.
The added value of DIY is different for everyone. We hope that this series of posts has helped you decide if DIY renovations are worth your time, money and quality of life. By no means do we want to discourage anyone from taking on DIY; instead, we want to help arm you with the information you need to decide how much of your project you are going to DIY.
To wrap up our series, we have compiled a list of DIY renovation Do’s and Don’ts from all 3 posts:
- Do your research
- Do make the choice that works for you
- Don’t assume everything will go right
- Do realistically plan time for DIY projects
- Do know how much you are saving by doing it yourself
- Don’t forget to budget for living costs
- Do budget a contingency fund
- Do prepare for working with your partner
- Don’t over renovate for the home or area
- Do know the value you’re adding and return on investment
- Do decide if the stress of a DIY renovation is worth it for the result
What would you add to our list of DIY renovation Do’s and Don’ts? Let us know in the comments.
Denise and Sean
P.S. Share this series with your firends and family that may be considering a DIY project.