Home renovation tips

You read that right: DIY rookie Emilie Sommerhoff shares the lessons she and her husband have learned.

As if we didn’t have enough going on (we’re recently married and new business owners), my husband and I decided to renovate our circa 1967 kitchen ... ourselves. Ah, the follies of the overly ambitious and dumbly confident.

Don’t worry. This story has a happy ending. And we have a sparkling new kitchen. We also have a bag of freshly learned tricks. My husband can prepare a four-course meal on a Bunsen burner, for example.

Now, from cost realities to emotional meltdowns, let these true DIY tales make your renovation easier.

It’s Going to Cost HOW Much?
The number of appliances and finishes in a kitchen quickly pushes the cost up. And then there’s the psychology of it all: “Heck, we’ve spent this much,” you think. “Why not get the stainless French-door refrigerator we’ve always wanted?” And suddenly, the budget becomes “just a starting point.”

Initially, we thought we could make the improvements we wanted for under $6,000. But, according to Remodeling magazine, the national average spent on a “minor” kitchen remodel is $21,411 in 2009/2010. That includes new appliances, cabinet doors and drawers, countertops, a sink and flooring, but not restructuring walls or moving plumbing. Faced with that price tag, we asked ourselves a few questions. What was our budget, really? Where could we save? And how were we going to pay for it?

Crunching the Numbers
Remember, you’re not the only one who appreciates an updated kitchen or bathroom. Remodeling magazine reports a 78.3 percent average resale return, or $16,773, on that “minor” kitchen renovation. That number is down from over 100 percent during the real estate boom of 2004 and 2005, says Stephen Melman, director, Economic Services, with the National Association of Home Builders, but it’s still one of the best remodeling investments a homeowner can make. My husband took our research a step further and called a trustworthy neighborhood realtor to get her take on what the local housing market would bear.

With appliances and construction dating back to a period long before Energy Star, we had another easy incentive in energy rebates. The federal tax credits for energy-efficiency upgrades, set to expire on Dec. 31, 2010, would cover 30 percent of the cost up to $1,500 for updates to our insulation and windows. One visit from our energy supplier and we had identified more than $200 in additional rebate opportunities if we replaced our aluminum windows and energy-sucking fridge with better alternatives. (Make sure you save the paperwork, which is often attached to the item, to claim your rebate.)

Find the Funds
Since selling my husband’s Hummingbird guitar on eBay was apparently not an option, we decided to tap some of our equity in the house. We didn’t want to refinance our mortgage, so we considered a home equity loan and line of credit.

A home equity loan, or second mortgage, offered us a fixed interest rate. “This is for the customer who doesn’t want to take interest rate risk,” explained Rick Fletcher, associate vice president, Product, for Nationwide Bank®. “The downside is you have to take the full amount upfront, and you also start paying principal and interest right away.”

With a home equity line of credit, the interest rate is variable and could change at any time. While Fletcher warned that rate movement at this point is “mostly going to be up,” the current interest rate was hard to pass up. We also liked the idea of paying interest-only for a period of time, with the option to tack on a principal payment depending on cash flow. Home equity line of credit it was.