How to finance a renovation has emerged as a key aspect of profitable reno businesses over the years. It is an excellent way to build wealth while also making a good return on your investments.
However, home renovation, like any other business, requires knowledge, planning, and financial savvy to be successful.
Must-have qualities you need to finance a renovation
If you want to succeed and increase your income through a home renovation, you must have these qualities:
- Good judgment
Bernadette Janson is the founder of The School Of Renovating. She provides straightforward advice on what it takes for would-be home renovators to get from where they are to where they need to be to finance a renovation.
Top reasons to replace your income with renovating
- You are not happy with your regular jobs
- You have reached or are approaching retirement age
- You want to stay home and raise your children
- You are keen to explore your passion and skills for creating beautiful homes
Focus on how you can finance a renovation
Home renovations require good budgeting and financial planning. Renovation projects can often be more expensive than anticipated and take significantly longer than intended.
To buy and complete a renovation project, you need to have access to adequate funds, and getting finance usually requires having an income.
(Listen to Bernadette’s Podcast episode “How to plan your escape from 9-to-5 to reno heaven“)
When you decide to leave your job to do home renovations, you need to understand you are also giving up money, and you may not be able to finance a renovation if your primary source of income is affected.
For this reason, Bernadette advises you to make the following practical decisions:
- You must begin doing projects before quitting your work, so you can establish a reputation for producing a substantial profit from renovation projects
- Begin working on one or two projects per year to generate the figures you will need to present to your broker or financial institution to obtain finance
- Do not commit to doing DIY in your first few projects because –
- It forces you to be more strategic
- It leaves you free to be able to manage the project
- You can manage the time frame
- You can manage the quality of the project
You must only commit to basic DIY-friendly projects such as ripping out old kitchens and bathrooms, removing old ceilings, cutting insulation, and other similar tasks.
Learn to work effectively with your trades
Leave the majority of the work to tradespeople who are experts in construction and home renovation.
If you follow this guidance, you will complete the projects on time and on budget and successfully sell your properties for the desired price.
Once you start to create your renovation portfolio, you will be much more qualified to ask for financing for your renovation.