011323 Real Estate Directory

HOW A DATA NERD TACKLES HOME IMPROVEMENT

Elizabeth Renter NERDWALLET

I started 2021 by buying an 1885 hulk of a home, sight unseen, with visions of restoring its earlier grandeur. In almost two years, I’ve restored three of many rooms and tackled multiple smaller projects, by myself.

Do-it-yourself home improvements can save a lot of money, but that’s hardly the only reason to dive in. One in 4 homeowners took on DIY home improvement projects over the past two years because they like doing that kind of work themselves, according to the recent NerdWallet Home Improvement Report.

I count myself among them. The joy of this work was instilled in me at a young age by my dad, a former shop class teacher turned school administrator, and hobbyist carpenter. I even built my own Barbie house, a blue one-bedroom ranch.

Between my current house and my previous one, the only jobs I paid professionals for were urgent or massive ones: a new roof and demolition of outbuildings, for example. The list of DIY projects, on the other hand, is extensive and has included removing wallpaper, carpet and popcorn ceiling; skim coating walls and ceilings; refinishing floors; restoring and replacing trim work; rewiring push-button light switches and original light fixtures; and stripping

and restoring an original mantle.

In most cases, I take as much time to plan projects as I do to execute them, and the first step is deciding whether doing it myself makes sense.

Consider these three variables carefully.

Ability

Whether I have the ability or skills to take on a project has as much to do with what I already know as what I’m able to learn. Yes, you can learn just about anything on YouTube these days, but what you’re really looking for is what you can learn to do well, with minimal chance of messing it up.

Talk with someone who

has undertaken this kind of work. If you don’t have a friend with a DIY resume, have a contractor or two provide estimates and use these visits as an intel-gathering opportunity. Ask them how the project would unfold, what permits might be needed, what could go wrong and how many people will be involved. This visit can serve multiple purposes — helping you understand the skill level of the project, as well as determining how long a professional would take and what their costs would be.

Time

It may take longer for a contractor to begin a project, but there’s little doubt

you will take longer than them to do the actual work. It can be difficult to estimate precisely how much longer. Instead of a deadline, go in with a target date range to save yourself some disappointment. Break the project into manageable steps, and be generous when estimating the time to complete each one.

Now is also a good time to think about how this time will affect daily life. The inconvenience of a four- to sixweek project in your only bathroom, for example, is likely justification to pay a professional for an accelerated timeline.

I live alone in a large house, so the time spent restoring an extra bedroom

didn’t affect my day-to-day life much. In a few years, I’m planning a full kitchen renovation — I’ll be hiring professionals for that, precisely because of the time constraints. I’ll pay to limit how long I’m cooking dinner in a laundry room microwave.

Costs

The potential for saving on labor can entice people to DIY, but failing to properly weigh the previous two factors — ability and time — could make your DIY project more expensive than hiring skilled labor in the first place. And doing it yourself only because it’ll be cheaper could make it loathsome.

Figure out base project costs: Here we’re talking about materials and tools. Make a list and gather prices. Depending on the project, your tools may be as simple as a few paintbrushes and rollers, but if you’re delving into more than just painting, the equipment costs can rise quickly. (And even paint isn’t cheap these days.)

If you need a tool you don’t already own, consider borrowing it. While I have a pretty extensive collection, there are still times I find myself in need of something I don’t have. If it’s a tool I’ll use again and again, I may buy it.

However, if it’s something very specialized, I’ll borrow it from a family member or rent it from a hardware store. Yes, you can rent

pretty much any power tool you need from a hardware store.

Add a budget buffer: There’s a good chance your costs will go above that original estimate — you forget something, prices go up or you accidentally put a hole in the wall behind you while wielding a sledgehammer during demolition. Give yourself a buffer; I suggest 20 percent.

Outline your funding plans: If your project is a small one, you can likely pay cash, but if your project is pricier, carefully consider your home improvement financing options and their costs.

Let the estimated project total and time you’ll need to pay it off be your guide:

w Using an existing credit card can be a good option if you need the total funding upfront. It’s wise to pay the balance down quickly, to save on interest and protect your credit score from the negative impact of high utilization.

w Opening a new credit card with an introductory interest-free period can give you additional time to pay, at little additional cost.

w A personal loan can often provide fast funding and extended payoff terms.

w Tapping your home equity for credit in the form of a loan or home equity line of credit may have lower interest rates but take longer to fund. So, it’s better for larger projects and balances you’ll want some time to pay off.

Average long-term mortgage rate comes back down this week

ASSOCIATED PRESS

WASHINGTON, D.C. — After two straight weekly increases, the average long-term U.S. mortgage rate came back down this week, but remains a significant hurdle for many prospective homebuyers.

Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.33 percent from 6.48 percent last week. A year ago the average rate was 3.45 percent.

The average long-term rate reached a two-decade high of 7.08 percent in the fall as the Federal Reserve continued to boost its key lending rate in its quest to cool the economy and tame inflation.

At its final meeting of 2022, the Federal Reserve raised its rate 0.50 percentage points, its seventh increase last year. That pushed the central bank’s key rate to a range of 4.25 percent to 4.5 percent, its highest level in 15 years.

Though another report Thursday showed that inflation at the consumer level eased to 6.5 percent in December — a sixth straight monthly decline — Fed officials have signaled that they may raise the central bank’s main borrowing rate another three-quarters of a point in 2023, which would be in a range of 5 percent to 5.25 percent.

The big increase in mortgage rates during the past year has tripped up the housing market, with sales of existing homes falling for 10 straight months to the lowest level in more than a decade.

Though home prices have retreated as demand has declined, they are still nearly 11 percent higher than a year ago.

ROGELIO V. SOLIS / ASSOCIATED PRESS FILE

A workman aligns a plank before cutting it for use at a new housing site in Madison County, Miss., on March 16, 2021.