Friday, February 3, 2023

5 Signs It’s the Wrong Time to Renovate Your Home

Are you spending a lot of time recently dreaming about how you might improve your home? We’ve all been there and experienced the home renovation itch. There’s nothing wrong with making changes to your dwelling that will make your life happier and more comfortable, but there is such a thing as the “wrong time” to undertake any major changes. If any of the following scenarios apply to you, consider keeping the changes (for now) to a minimum.

1. You have existing high-interest debt

If you’re thinking about renovating your home but still have outstanding high-interest debt, it’s definitely not the right time to get that new bathroom or kitchen installed. Carrying high-interest debt is a drain on your finances and makes it tough to save for the future.

Let’s say you owe $10,000 on a credit card with an APR of 17%. Paying that debt off before you do anything else is like investing 17% in yourself. Once the debt is paid in full, you’ll have those funds available to make actual investments for your future.

2. Your emergency account is lacking

Given the percentage of Americans who don’t have enough cash on hand to cover an emergency, it is vital to ensure that you have a healthy emergency fund before spending anything on home renovations.

The rule of thumb has long been that you should have enough put away to cover three to six months’ worth of bills, but as the COVID-19 pandemic has shown, emergencies can last even longer.

3. You expect a healthy return on your investment

The value of your home is likely to increase over time, but that may not be due to expensive home improvements. According to, expensive projects don’t always equal a higher return on investment (ROI). For example, a mid-range major kitchen remodel has a ROI value of 53%. That means if you spend $80,000 to upgrade your kitchen, you can expect to recoup approximately $42,000 when you sell. Adding a mid-range bathroom has an ROI of 52%.

In other words, if you’re justifying your remodeling efforts by saying you’ll earn the money back when you sell, that’s probably not true. On the other hand, if you’re strictly making changes for your own enjoyment, that’s an entirely different story.

4. You don’t plan to stay long

Unless you’re confident that you’ll live in a home long enough to enjoy the upgrades, you may want to keep the money in your bank account or search for investments that will put the funds to better use.

5. Renovations will overvalue your home

One of the easiest ways to get stuck in a house when it’s time to sell is to make it the most valuable home in your neighborhood. Let’s say homes in your area are selling for an average of $300,000, but your home is valued at $450,000. It’s going to be tough to find someone willing to take out a mortgage on the most overvalued home in the neighborhood — especially if they can go down the street and buy a basic model at a cheaper price.

If you’re itching to put your stamp on a house to make it feel like your own, consider less expensive changes that you can pay for as you go. For example, changing out light fixtures, painting rooms, hanging personal art, and giving the cabinets a facelift by adding new hardware all add customized touches that will be uniquely you.


This article was written by Dana George from The Motley Fool and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to