An article from HGTVpro.com provides some estimates for budgeting for your new home upgrades (better flooring, tiles, etc..) based on what others are spending. We’re buying a home this year, and currently in the process of selecting the upgrades we might want. Of course, we don’t HAVE to upgrade anything. As part of the incentive to buy, we were offered many of the first level upgrades, which we gladly accepted. However, there may be some additional areas that we might want to upgrade or we might want to move from a level one upgrade to a second or third level. We also plan to do some of the upgrading our self. The article mentions that:
“More than ever, homeowners strive to customize their living spaces, making their homes reflective of their personalities and unique lifestyle needs. Building a semi-custom home provides consumers with a blank canvas upon which to imprint their design and lifestyle preferences. New-home construction buyers have numerous upgrade options that are offered throughout the home building process and should plan to budget ahead of time.”
The article mentions for those buying homes and town homes with a base price of $180,000 to $300,000 (like us) spent 9.7 % on upgrades. We decided on 5% a few weeks ago. Let’s hope we can stick to it. To all you new home purchasers out there: what % did you put into upgrades?
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I think budgeting 8% for home improvement is a bit over the top. The savings rate for the average American is now below zero–I think a higher priority for that 8% would be towards investment and savings.
Because home improvements are a generally a poor investment, returning less than they actually cost, it would probably be better to do them more cheaply, over time, and invest most of that 8% elsewhere. Like the stock market.
I agree. For most Americans who don’t have adequate savings for emergencies or towards retirement, that 8% might be too high. Probably should have noted this in the post. The study actually found a much bigger percentage in most parts of the country.
By the way, what we’re actually looking to spend is somewhere around 2.5%, much less than the 5% we originally budgeted. We also plan to do some of the improvements “over time” like you mentioned.
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