You’ve finally decided to let your vacant home and generate more income for yourself or your family. The problem is it won’t going to be cheap. Most renovators overshoot their budget for about 20 percent.
How do you do it without spending all your savings on the project? Here are some ideas:
1. Claim Capital Allowances
What is a capital allowance? A capital allowance is an individual or company tax deduction that allows you to deduct or “write off” certain capital expenses over a period. This is different from depreciation, which is a non-cash expense that is not tax-deductible.
In exchange, you can use capital allowances to deduct a certain percentage of the cost of a major asset you acquired and will be using for at least three years from your income.
Under UK law, you cannot claim this allowance to a building. However, you can declare capital allowances on residential property letting, especially on its improvements.
2. Focus on the Essentials
Renovation is a broad term that includes all the works, from replacing the flooring to adding on new rooms. However, have you considered what makes a house sellable?
Before making any renovations, here are some essential components of a good renovation plan:
- Kitchen – A new kitchen or a complete replacement means a higher purchase price and more rent over the years.
- Plumbing – If your house doesn’t have a central heating system or hot water, it needs to be replaced.
- Roofing – As roofs age, they lose their ability to keep out rain and wind. Invest in a new roof instead of just covering it up.
- Bathroom – A new bathroom or a complete replacement of the current one usually significantly impacts rent.
Keep in mind the minimum fitness standards. For example, the house needs to be structurally stable and doesn’t have any issues that might compromise the health of the occupants.
3. Look for Secondhand Materials
Going secondhand doesn’t always mean you’re buying junk. If you need to save money on renovations, it’s time to look into stores that sell used or refurbished building materials like doors, windows, and cabinets.
Just be mindful of how you buy secondhand materials, as they can have a limited warranty. For example, it’s best not to purchase kitchen cabinets from Craigslist because there’s no way for you to tell if the seller has cleaned them properly before selling them. Also, keep in mind that most building material suppliers do not accept returns.
4. Do It Yourself
You can save big on renovation costs depending on your skill set. If you have carpentry skills, for instance, you have the option to do it yourself instead of hiring a contractor to do it for you.
However, there’s also another thing to consider: time. Many renovation projects take much longer than expected. If you’re on a tight schedule, then DIY might not be the best option for you.
Not all renovation jobs can be DIY as well. Things like roofing repairs, bad sewer lines, and basement waterproofing require licensed experts.
5. Consider Renovating During Off-peak Season
Construction remains one of the bustling businesses in the UK, but the industry also has its highs and lows. When it comes to home renovations, the busiest times are spring and summer:
- Around this time, the weather is excellent, so the chances of experiencing delays are low.
- More people have more time. Children, for example, are on a school break. Parents can find more time to look for houses or remodel their property.
As a client, hiring a contractor for renovations around this time can be more expensive since the demand is high. If you’re trying to save money, you can schedule the project during off-peak season. The best time is fall when the demand for contractors dips, but the weather isn’t frigid to cause serious delays or cancellations.
6. Get Free Estimates
Do you know that many contractors can give you free estimates on your home renovations? You can take advantage of this to find out the potential cost for the project and generate a ballpark figure. This way, it is easier for you to compare quotes.
How do you get free estimates from contractors? A lot of them offer free quotes on their website. If not, call the company to set up an appointment. Tell them your renovation plans and ask for a price quote. They might be able to give you an estimate during that meeting or send it to your email address later on.
When it comes to renovations, the key is to be smarter in spending. It’s no secret that home improvements make a house more valuable, but you don’t have to overspend on trivial things you can do yourself at significant cost savings. Follow this guide, and you will surely get ahead with your renovation plans.