With spring right around the corner, March is a popular time for homeowners to start planning out their renovation projects. But now that COVID-19 is destroying the stock market, turning the economy upside down, and putting the country at risk of a full-fledged recession, you may be wondering whether moving forward with your renovation project is a good idea.
The answer? It depends.
How will you pay for your renovations?
Some renovations are more expensive than others. If you're looking at a low-cost project you can easily pay for in cash without making much of a dent in your savings, then there's no need to put it off because of the current health crisis. In fact, now's actually a good time to embark on a time-consuming renovation project, given that you're likely stuck in your home anyway in an attempt to self-isolate.
On the other hand, you may want to put off a larger, more expensive renovation. For one thing, if you're planning to pay for that project using cash, parting with a huge chunk of it may not be the best move right now.
It's too soon to tell how badly COVID-19 will hurt the economy, but if a recession strikes, jobs could be compromised -- including yours. At that point, you'll need all the money you can get to pay your bills while you look for work. So before you withdraw a substantial portion of your savings, think about whether you're better off delaying that project another season.
Along these lines, if you're planning to pay for your upcoming renovation by borrowing money, whether via credit cards, a personal loan, or a home equity loan or line of credit, you may want to rethink that. If your job does indeed become a casualty of COVID-19, the last thing you'll want is another monthly debt payment to deal with when you're scrambling to pay for basics. As such, it could pay to hold off, wait for things to stabilize, and then consider parting with that money.
What's the right move for you?
If you have loads of cash sitting in savings and can afford your renovation project while still leaving yourself with at least six months' worth of living expenses in the bank, then you may be OK to move forward. Otherwise, you might consider holding off, provided that doing so won't negatively impact your quality of life.
For example, if you're looking to tear down a perfectly functional kitchen in favor of an updated one, that's probably something that can wait. But if you're aiming to upgrade a heating and cooling system that doesn't work very well, delaying that project could make home life unpleasant -- especially at a time when you're stuck in the house.
One final thing: With the economy potentially taking a turn for the worse, there's a chance home values will start to decline in the not-so-distant future. Keep that in mind if you're planning to renovate and sell shortly after the fact, because you may not recoup your money the way you expect to.