Acsah here, guest writing on Ben’s Big Idea this week! I thought it would be fun to share our current project and the thought process behind it. While we have been real estate investors for the past 5 years, we purchased our first personal residence 8 months ago. As personal finance advisor Ramit Sethi teaches, it is critical to know what your money dials are. These are the aspects of your life that you enjoy spending money on (which should continue to grow) versus aspects of your life that you don’t enjoy spending money on (which should decrease in comparison). Because we have moved 8 times in the past 8 years (you read that right), home furnishings and projects have always been at the bottom of our priorities. While I don’t think it will ever be one of our main money dials, it has increased in importance which brings us to where we are now: Renovating our backyard!
Today, we'll explore how to determine the ideal budget for your backyard renovation to ensure you strike the right balance between personal satisfaction and potential return on investment.
Define Your Goals:
Start by identifying your primary objectives for the backyard renovation. Do you envision a tranquil oasis for relaxation, a lively entertaining area, or a combination of both?
Research Market Trends:
Conduct research on the real estate market in your area to gain insights into what potential buyers are seeking in outdoor spaces. Look for features and amenities that are in demand and consider incorporating them into your renovation plans to increase chances of attracting buyers when the time comes to sell.
Prioritize Quality and Durability:
Investing in quality materials and durable features ensures that your backyard renovation stands the test of time, enhancing both your enjoyment and the resale value. Choose sturdy outdoor furniture, durable flooring, and low-maintenance landscaping to minimize future expenses and maximize longevity.
Focus on Key Elements:
Allocate a significant portion of your budget to key elements that make a substantial impact on both personal enjoyment and resale value. These may include a well-designed outdoor kitchen or barbecue area, a stylish deck or patio, artificial turf, comfortable seating arrangements, a fire pit, or a swimming pool. These features can create a memorable outdoor experience and significantly increase the appeal of your property to potential buyers.
DIY vs. Professional Help:
Consider your skills, available time, and the complexity of the project. While some aspects can be tackled as DIY projects, others may require professional assistance to ensure a high-quality finish. Allocate a portion of your budget for expert help, especially for specialized tasks such as landscaping or electrical installations.
Conclusion:
When determining the budget for your backyard renovation, it's essential to strike a balance between personal enjoyment and potential resale value. From what we’ve read, the typical average renovation cost recovery for backyards can range from 70% to 90%, though we personally have taken a more conservative approach at expecting a 50% cost recovery when we eventually sell this home. Remember, the ultimate goal is to create an outdoor haven that brings joy to your life while enticing future buyers with its beauty and functionality.
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