One of the shows my wife and I like to watch is Million Dollar Listing: New York. The price tag on the apartments and condos on the show can be shocking for the average person.
While it would be wonderful to have enough money to be able to afford purchasing a $3 million dollar condo and pouring $500 thousand into renovations, that’s simply not the reality for a (very) large majority of homeowners.
The biggest investment most people will make in their life is their home. While the purchase price of a home is high, the money doesn’t stop there. Repairs, renovations, and upgrades can cost hundreds of thousands of dollars – even on a modest middle-class home.
With that in mind I think it’s safe to say that homeowners need to save money on their home. Today I will be sharing 3 different ways homeowners can save money.
1) Do-It-Yourself
The easiest way a homeowner can save money is taking the do-it-yourself (DIY) route when it comes to home repairs and renovations. If you’re a homeowner I’m sure you are aware just how costly plumbers, electricians, and general contractors can be. I was looking on Angie’s List recently and saw that many people paid between $20-$50k for a bathroom remodel. Do you think these homeowners will get that money back when they sell their home? I don’t.
Because of the high cost of contractors, it’s important to find home projects you can do yourself. In theory any homeowner could do almost any renovation or home project. Problem is, the DIY approach takes a lot of time. You need to make sure that you have the proper knowledge and plan before diving into a project.
Whatever home project that homeowners can do themselves will typically result in fairly large savings. Labor for most projects isn’t cheap, and there’s a never-ending list of repairs and renovations that may need to be done.
2) Research Contractors
Homeowners will have to hire contractors for the projects that are either not safe or not conducive to the DIY approach. Finding the right contractor used to be pretty difficult. It was hard to know whether you hired the right contractor until after the job was completed. That all changed when Angie’s List came around. If you need to hire a contractor I would highly recommend researching them on Angie’s List first.
I can’t stress enough how important it is to research contractors. I had a sewer drain-out problem that one contractor quoted me $7,000 for the repair. He also told me not to call the city because they would just say it wasn’t their responsibility. I found a second contractor on Angie’s List who had practically 100% positive reviews. Not only was he patient and understanding, but his price was much lower: under $3,000 for the repair.
This same contractor took it upon himself to go to city hall (in person) and talk to the city engineer. She admitted that the water main broke four years ago and the repair was their fault. Not only did the city fund the project, they paid me back for all my plumbing bills. In short: researching contractors saved me thousands of dollars.
3) Make Reasonable Home Renovations
The third way homeowners can save money is by making reasonable renovations. It’s important to factor in the neighborhood and style of home when deciding on what home renovations to make. Remember the $20-$50k bathroom renovations I mentioned earlier? Let’s hope it wasn’t for a small starter home in a neighborhood that has relatively low housing prices.
A renovation that screams high-end might make sense in a neighborhood where many of the homes are worth in excess of a million dollars, but it likely won’t make sense in a neighborhood filled with starter homes. A buyer may be just as happy with a home that has laminate flooring as they are with a home that has hardwood. In fact, they may prefer the lower price that the laminate home offers.
What ways have you saved money as a homeowner? Has researching contractors paid off for you? If you are currently renting, what are you looking for in your first home?
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Photo by Emily May
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I’m a huge proponent of DIY and #3. Knowing your neighborhood and calculating the ROI of an improvement is crucial. We considered adding a third bathroom in our home, but, we figured we wouldn’t be able to recoup the cost, so, we’re not doing the project. I think too often renovations are about appearances and not necessarily about what will increase the value of a home. In our case, we’d have to lose a bedroom to squeeze in the bathroom and bedrooms are king in our area—worth far more than an extra bath.
I used to watch Million Dollar listing NY when we had cable. That real estate market is crazy! So is the high concentration of wealth in that city. Wow. I think doing reasonable home renovations in relation to the value of the house and neighborhood is key. A family friend renovated their kitchen last year. It was a gorgeous remodel but when they went to sell the house this year, they didn’t get a good return on that investment. It was actually too high-end.
We have saved money with DIY plenty of times. There are some things I wouldn’t DIY though because it would probably look awful =)
I went the DIY route for my kitchen flooring. It took a lot of time and wasn’t an easy task. I saved a bundle of money though.
If you are going to use a contractor or vendor, don’t always go with the lowest price to save money. I work in the construction industry and can’t even begin to tell you how many times my company has to fix something due to a homeowner being cheap and only looking at the bottom line.
Mrs. Frugalwoods You’re smart for doing an analysis of what your ROI is on your bathroom addition. I think it’s all about appearances as well, and I think sometimes you can get renovations to pay off if you get the right buyer in the door when it’s on the market, but that’s a big “if.” We’ve definitely scaled back the work we’ll do on our home the next few years because we are better off selling our house and putting the money into a new house.
BudgetforMore Yeah I really enjoy the show and seeing the properties for sale. I think it’s crazy how even a “modest” apartment can cost $1.5 – $2 million.
I hear you about the kitchen remodels. Kitchen remodels can get into the hundreds of thousands. I plan on gutting our kitchen but will put in a “nice” updated kitchen – nothing too expensive but something that people in the market for a starter home will love.
Holly at ClubThrifty Haha yes I’ve read your posts about the things you wouldn’t DIY such as tile. I also refuse to tile because I’d rather leave it up to someone who has done tile work before.
manneredmoney Good for you! I actually plan on laying down hardwood or laminate across our entire first floor. I will buy it all at once but will probably take my time actually doing the work. I think by doing it myself I’ll save a ton of money while also learning a bit more about home improvement.
believeinabudget Great suggestion and thanks for sharing. With that being said, I also think the reverse is true. Paying someone a premium does not mean they do premium work. Always check Angie’s List first.
I love watching Million Dollar Listing NY but it also makes me sad since I live in NYC and it always makes me think that I might never own property here. When I do (hopefully), I plan to do DIY and look for a fixer upper in a more desirable location (instead of the other way around).
I agree with renovating based on your neighborhood. We bought a small home that was advertised as a starter. For our renovations we spent about $6k for the main bathroom remodel and about $12k for the kitchen. We bought quality items that will last for years but not anything fancy or over priced. It’s important to go with a style that fits the neighborhood and the home. And you are not kidding about the cost of labor. We paid $20k just for labor.
All good tips, DC. We’re minimalist when it comes to home improvement: basically, we like the house as we bought it. We put a patio paver out back, but nothing major. When something breaks, I fix it. :)
I do think we’ll do a kitchen remodel soon, but we’ll DIY it. No way would we pay 5 figures for a kitchen.
DonebyForty I would love to be minimalist when it comes to home improvement, but I bought our house with the intent on fixing it up myself so that I could get some sweat equity out of the deal.
I agree with you about not paying five figures for a kitchen. I thankfully have a brother-in-law who is a contractor and I typically pay him to do the jobs I don’t want to or are not qualified to do.
SavvyWithSaving Sounds like a great plan! It’s interesting to watch that show because of how the expensive real estate is “spreading.” I know they showed a number of multi-million dollar houses in Harlem. Seems to becoming the norm.
Practical Cents $18k for a bathroom and kitchen is a GREAT deal. I really hope we can pull that off in our house, it would be a huge win. Those are two things we really want to do in this home (or you could argue NEED to do). Also hope to replace the flooring, trim, and doors. Hopefully it won’t even be recognizable when we are done.
Great tips especially the DIY. We had a very annoying drain in the bathroom sink that just wouldn’t get unclogged with the usual methods. I was curious and looked up some plumbers and the price ranged from $80-$250 just to have them come out. I then clicked over to Youtube and found a great video that showed how to take out the various pipes and cleaned the drain out. No tools needed and 20 minutes of work for no cost. I’m usually averse to doing stuff around the house but those kinds of savings get me into gear!
thebrokeprof That’s awesome you were able to save some money on the drain clearing. I also prefer to pay someone for plumbing and other work, but I typically will spend at least a little time seeing if it’s something I can do myself.