When people are caught up in the news surrounding a slow economy the first response is to pull back and guard the gates. It's not easy to sit through night after night of bad economic news and many businesses suffer because people are stopping their plans as a result.
However, when there is such an economic slowdown there are many advantages to going ahead with planned renovations or making new ones. Because even though home prices have dipped below the price of previous years there is a long history of real estate markets bouncing back within a few years. Of course this does not included homes that are bought in a super-inflated economy as these homes will take years to regain their value. But money invested in a home on a regular bases is almost recession-proof and proves time-after-time to be a solid investment.
Having a home in a desirable location is one of the best reasons to renovate. Even if the home will not be resold for a long time the value will increase and so will the equity. This means that future large purchases like a recreational vehicle or cottage can be acquired because of the value built up in the residence. As the old saying goes â€œeven an outhouse on a piece of land in a good location is a good investment.â€
Economic booms are like runaway trains: There is no driver. What happens during these times is that residential growth explodes and labour is in short supply. This means that many projects are rushed, or could be built by inexperienced workers, and some of the failsafe devices and self-examination by contractors' quality inspectors are hurried. Many experienced contractors will only take as much work as they can handle but too many with land the job first and then worry about how they will find the crews to work it. As a result the courts are rife with homeowners suing contractors over shoddy workmanship and, to the dismay of the complainants, a lot of these companies go belly up in a recession. This means that there's no one to either get money from or fix the problems so there will be another large expenditure just to complete something that has already been paid.
The contractors who survive slow times are experienced as many have seen these slow periods before where renovation and construction leads are down. This is because the companies or individuals are good business people. So there is a good chance that a homeowner can get a qualified renovator simply by picking one who has been in business for more than a decade. Of course all contractor's references followed but these companies ill have also kept their best people and are hungry for work to keep them going until better times arrive. This means that the homeowner can expect better service, workmanship and attention to deadlines, qualities that are often missing during a good economy.
When the economy is hot and building is in a frenzy the cost of labour and materials goes up. It's simply a matter of supply-and-demand, especially in general construction. The forest crews who cut the wood, the manufacturing personnel and the builders are pushing the envelope to get the required goods and services to the developers and home builders so prices on labour and materials begins to escalate.
In slow times materials companies still have shareholders to satisfy but also want to hold onto personnel that they have invested large amounts to train. They know they will have to drop the prices and so will demand a price drop from the people who supply them raw materials. This is then passed on to the contractor who is also trying to keep trained crews working. So the contractor can buy materials cheaper and can pay a more reasonable wage for carpenters and subtrades to, for example, tile a bathroom, than they could during a building boom. This saving is then passed onto the homeowner.
4. Time and Mess
One of the biggest problems with large renovation is that the contractor is saddled with other jobs and so are his or her crews and subtrades. For the contractor this makes scheduling a delicate balancing act and many time the homeowner is left living in a mess for weeks at a time. For example, if the addition is ready to drywall but the plumber has not completed his or her work then nothing more can be down. This throws the drywall crews off their schedule, as well as the painters and the flooring people. This is usually because, again, new and more lucrative work dangled in front of the subtrades that is not easy to pass up.
In a more relaxed economy, or a recession, work is the Holy Grail of survival and so renovations are, for the most part, performed to the best of professional standards. In some cases where the family has to move out for a large refurbishment, the work is scheduled around the clock so that the inconveniences is only short term.
5. The Cost of Money and Rebates
Since the 190's banks have been lending money in single-digit interest and recently this has dropped to extreme lows. For the qualified borrower who does a major renovation this means that the cost of the project will be even cheaper over the long run because of the savings in money owed to the bank. Not only that the Federal government has been offering both energy rebates and tax credits to homeowners so this will bring the price down even further.
For more information on your renovation simply post your project and have a contractor contact you at www.trustedpros.ca.Posted by: TrustedPros