You have your house plan, your choices of paint and tools, and a picture in your head. You have the expenses figured out.. or so you think. The financial aspect of remodeling your home may seem simple. But there are more to consider when financing a remodeling project.

First, ask yourself: Is the home improvement for your own benefit or is it to help you sell the property?

This question is important because you will be remodeling the house with either your family’s needs or the next occupant’s needs as basis. The changes of the house should naturally be for the good of whoever will use the house after the remodeling. If the purpose of remodeling your house is to make it better for you and your family to live in, then by all means remodel the home however you want. But if your goal is to make a higher sales price for the house, then don’t be too specific on the remodeling. Compare the property with those in the neighborhood first. If your home improvement plans will bring the house to the neighborhood’s level, the sales price can be increased. Being too different from the neighborhood (like having the only swimming pool or being covered with so many tall bushes), on the other hand, might only put off buyers.

In remodeling the house for the buyers, you might want to stay safe. Tastes vary for every person and the buyers may not like how you remodeled it. They might want to have their own decorations on the house when they move in. Staying simple is sometimes the better decision.

How To Pay For Your Remodeling Project

There are many options on how to pay for your remodeling project. You may be able to spend less than the normal amount, or you may be able to deduct the interest from your income taxes.

The simplest option in financing your remodeling project is to use an unsecured loan. This type of loan, however, is only best when your remodeling project costs under $10, 000. The loan costs won’t be associated with other types of loans, but the interest rate would be higher.

Opting for the home equity line of credit is also a plan. If your house is worth more than your current mortgage you can borrow against that amount. You can borrow the money in stages if you want, and no interest will be charged until you actually borrow the money. You are expected to pay the closing costs to set up the loan, though.

One disadvantage of getting a home equity line of credit is that the interest rates vary and they may go up. Another downside is that you have to be prepared to pay the entire loan immediately if the lender tells you to.

Another option is having a ’second mortgage.’ The second mortgage is similar to the home equity loan in terms of having to borrow equity in your home. But a second mortgage has a fixed interest rate and is for a fixed period of time only.

For major projects, you can try to refinance your first mortgage. Using this option, you will be facing an interest rate lower than your existing mortgage, though you’ll still have to settle the closing costs. The interest can actually be deductible so ask for assistance from your tax advisor when refinancing your first mortgage.

401k or 403b retirement plans are also alternatives in financing your remodeling project. With the 401k or 403b, you’ll be able to avoid most closing costs. But you will only have a short amount of time to pay it back, so it would be best to use this loan only on smaller projects.

One last option is to borrow borrow from your contractor. This is actually the most costly of the loan options. Interest rates of this loan can be as high as 20% or more.

For everyone of these options, you are sure to find both advantages and disadvantages, Finance isn’t such a simple thing, especially where loans are concerned. Since loans are usually needed in remodeling a home, you should try look into the costs more closely and pick the best option for your remodeling project.

When selling a home after buying it, your primary focus would be how much your profit would be in the sale. So naturally you would want to raise the resale value of the house. In raising the resale value of the house, you look into the improvements you can make to make the raise possible.

You’re probably wondering what repairs and improvements to make that would surely increase the home’s resale value. The first part of the home that you should look into improving should be the kitchen! Nothing is more dramatic and noticeable to a buyer than a kitchen renovation.

Why the kitchen? The kitchen is like the social centerpoint of every family. This is where families get together and socialize with one another or with guests. It’s the one room wherein family members can completely gather around everyday!

So how do we start with the kitchen renovation? Here are some of the starting points:

Cabinets and Storage

Cabinets actually set the tone of mood of your kitchen. They determine how organized the workspace will be and will provide a clean look to the room. Closed storage is preferred; no glass doors or open shelves. Adding a little design (not too much; leave some designing for the buyers) and some fixtures can also liven things up.

Cabinets and storage are one of the biggest investment in a kitchen renovation, but they the most dividends.

Countertops

Countertops made of granite or marble are now popular because of their strength and aesthetic appearance.

Appliances

A fridge, a stove, and a dishwasher ought to do the trick! With these three already in the room, anyone can say that the kitchen is modernly redesigned already. Now if you opt for the appliances to be high-end and stainless-steel, not to mention energy-efficient, then your kitchen will definitely be seen as upgraded.

When looking for an alternative for a stainless steel finish, white remains the most popular. It exudes a clean and fresh feeling to the room. A white finish also costs less and can be as good as the stainless steel finish.

Flooring

What’s for the floor? What is popular right now is having light-tone wood and mahogany finishes, or bamboo or hardwood. These look great with white cabinets. If you’re worried about the tiles getting easily worn out and you’ve got heavy traffic in the kitchen, you can opt for oversized ceramic (or slate and limestone) floor tiles. Sheet vinyl flooring is a lower priced alternative. These two are definitely preferable to the peel-and-stick tiles.

Lighting

Last but not least is the lighting in the kitchen. You’ll need three types of lighting: ambient, task, and accent lighting. Ambient lighting is used to cast over a general illumination around the room. Task lighting is used when doing chores like cooking. Accent lighting is used to create an attractive focal point in the room.

One of the practices or real estate investors in making a nice profit is to sell a property as quickly as possible. Time is very vital when selling a property. You incur costs and expenses when you hold a property, and the longer you hold it the more money you spend.

Real estate investors make it a point to sell properties fast and in less than a month. But how do you make this possible? One can’t just put a property on sale and leave it to  wishful thinking that someone will come across it and buy it.

When selling a property, one has to consider what the buyer would want in a property. Buyers have their standards. So as a seller you have to set some standards in your property in order for a buyer to consider it. You have to know how to sell your property. How can you get your money otherwise?

This is where staging and designing come into the picture. These days, buyers are very critical and careful in the houses that they are considering. Staging and designing a house is now crucial to every seller and real estate investor who wants to sell their house as fast as possible.

7 Rules In Staging and Designing

1. Know Your Customer

This is the number on rule: know your customer. It is prevalent in every business that the customer comes first when offering a product or service. It is the customer who will be the user of the product after all. In real estate, it’ll be the customer who’s going to be living in the house. So when you are planning to stage and design the house to be sold, always think of the customer — what he or she likes, if they have a pet, if they have kids, if they have a car, etc.

The important thing here is that you try to stage and design the house according to what your customer would want it to be. Knowing your customer will also help in building trust between the two of you, building a much more comfortable and easier buyer-and-seller relationship. Not to mention that once you’ve build trust with your customer, you’ll be getting referrals from them. This will help save you time, money, and effort in promoting and advertising yourself to others.

2. Don’t Overfix!

This is a crime that designers are prone to. Too much can really be too much. You should not overfix a house, basically because all you really need to do is to fix the house enough for it to be looking well and without problems. Further improvements to the house will be made by the customers when they have bought it and furnished it to their liking.

3. Don’t Underspend!

Underspending, or underfixing, is also a big no. Yes, it’s clever to have less expenses. But staging and designing a house has its factors to consider. In fixing the house, you also have to consider the neighborhood and the area wherein the house is located. You also have to see what the other houses. You have to make the property fit in with the type of surroundings and type of houses alongside it. Make them similar, yet also different.

Don’t make the house look so shabby, especially when the neighborhood and other houses beside it all look so lively. You have to make it comparable to the other houses. The customer might also think that you don’t really care about the property. Yes, you’re selling it, but customers would like to have the feeling that the property that they are buying has been well taken cared of. Fixing the property without underspending is also a sign to the customers that you are offering them a property that is worth their money.

4. Don’t Sell an Empty or Dirty House or a House In Rehab

When selling a property, you have to go by the assumption that the customer does not have the imagination of a designer. So selling empty houses, dirty houses, and houses in rehab is not a very good idea. These kinds of houses do not give what a customer would generally want to see — a theme, some warmth, some color, etc. If you want to have a property sold, it is important to have it imprinted on the minds of your customers. An empty house, or a dirty house, is definitely not that thing that you want to be remembered by the people you are selling to.

5. Don’t Overstuff the House

Overstuffing should not be done when designing a house for sale. You should also leave some room for the customer’s stuff. In inspecting a house they are considering to buy, they would also have thoughts on what to put and where to put it. Naturally, they would want a house wherein there are some spaces left for their things. Customers also like a place that has some room for lots of movement. Space is also something that you have to consider in staging and designing a house.

6. Work With the Experts

You would need some help in staging and designing the house, of course. Taking care of the plumbings and getting the kitchen and living room back into shape again is something not a single person can do. When faced with looking for people to help you with, also stick to the people who are an expert in these fields. Choose the people that you trust and you know can do a good job. Working with people who are not up to the tasks would be a waste of time and money if you need to do something all over again because of their mistake.

7. Bring Out Emotions!

One thing that will have your property remembered (and most probably be bought) is to give an effect to the customers. So producing in the customers emotions and positive feedback will help you sell the house quickly. Appealing to the customer’s emotions is the most effective strategy. Design the house in which the customer will have some nostalgic feeling, or wherein he or she will feel some warmth, and you have got yourself a deal!

Rehabbing a property is one of the most flexible expenditures in real estate investing. Expenses to fix a house or furnish it can vary according to the extent of what needs to be rehabbed. Most real estate investors usually have a hard time looking for contractors or rehabbers that can give them the lowest cost for the rehab.

But there is a way to lessen the cost of rehabbing up to 40% less!

Lowering the Price

In business, one reason that the prices of similar products are so close to each other is because of competition. If company A, for example, has their product on an average price range, company B would follow the same price range. Most would actually prefer their product to be lower than the usual price. This is because they know that customers would want to save and spend their money on lower-priced products whenever they can.

To get a lower price, or a lower estimate (as rehabs are first estimated), this concept of manipulating competition among the many contractors is applied. Your try to bring in more contractors, more estimates, for more competition, which will ultimately give you lower prices.

Here’s how it exactly works.

Look into the yellow pages for a material supplier, for example a supplier of paint, and then go to that supplier’s store. Ask the supplier whether they know some people who can give an estimate on your property. There is a very big chance that the suppliers know of many people, especially their regular buyers who buy their equipment from the supplier and has built a good work relationship with the supplier.

The supplier would naturally refer you to his friends or his best customers. There is very little chance that he will refer you to a vague customer of his. For one, he’ll get a kickback if he refers his best customer to you. The referrals he made will give further boost his work relationship with his buyers and gain him more recommendations, and possibly a commission.

Once you’ve determined that the supplier has got good contractors buying from him, determine at which time you can catch most of them. In meeting them, you introduce yourself and ask them if they can do an estimate and when. Some of these people may already have appointments for the day and would decide to come to your property some other time. There is nothing you can do about that. But after that first contractor, there may be another one that will approach you and offer his services instead.

You ask for their estimates. On your initial survey, get three contractors to give an estimate on the costs of rehabbing your property. When you’ve gotten these estimates, pick out the lowest of the three and use that as a basis for the next batch of estimates.

Two Groups Of Three

The next batch of estimates?

Getting three contractors to give you their estimates will have naturally toned down the price by more or less 15%. As you pick out the estimates, each one of them will offer a lower price than the other.

Now if this group has given you an estimate at a price that has been lowered to 15%, what do you think will happen if you compare the lowest price of this batch to new one?

After you have surveyed for the lowest price in the first three contractors that you met, you are now set to meet three more contractors to give you their estimates. When they give their estimates, explain that one of the contractors you have talked to have given this estimate and it is by far the lowest among those you have received. Naturally, when the contractor hears of a lower estimate than his, he would be tempted to compete with it.

Again, you meet with three more contractors and get the lowest estimate. Then you compare and talk of the contractor in your first batch that he gave you a lower estimate. As the competition tightens, the contractor would give a lower estimate.

By this time, you would have already cut your costs for about 30-40%! It’s a simple tactic that’ll take time, effort, and simple analysis. But it will result in less costs for your estimates.