There will come a time as a homeowner when you want to update your house. Renovations are a smart way to invest in your property. Updates to the kitchen, bathroom, bedrooms, and other living spaces increase the property value, make a house more efficient, and create a more comfortable place to call home. As beneficial as remodeling your home can be, it doesn’t come without a price. Costing several thousand dollars, it is imperative that homeowners stay on top of the expenses to ensure they don’t go over budget. Essentially, that means knowing what to expect.
Determine What You Can Afford
Before deciding on a project or picking out designs you should first have a clear picture of how much you can afford to spend on a remodel. Review your personal budget to see if you have funds readily available. Next, look at other financial resources you can tap into (and afford to repay with interest). Depending on how much money you can afford to borrow you can try financial resources like advance loans, home equity loans, or borrowing from your retirement account.
Keep in mind that borrowing on the equity in your home or your retirement account can come with steep consequences if you’re unable to pay it back. You could be penalized on your taxes and lose your home if you don’t repay. Short-term loans, on the other hand, are small amounts of cash which can be repaid over several months. You don’t need any collateral and won’t have to worry about being charged extra by the IRS.
Now that you know how much money you have at your disposal, you’re ready to decide what part of your home you want to remodel. After making a decision, you should begin contacting contractors to get quotes. Knowing all the details of your remodel including what colors and finishes you want to use can help get you a more accurate estimate. You should request quotes from at least three service providers. Remember, quotes are only estimates and should not be taken as the exact amount you’ll pay for the remodel.
Trim the Fat
Sometimes the ideas you have in your mind don’t necessarily match your budget. If this is true for you, you may need to find a happy compromise. For example, if you envisioned a bathroom with marble tiles, perhaps go with a laminate tile with a marble pattern. Instead of expensive kitchen cabinets, ask the contractor how much it would cost to repurpose your existing ones. You might even suggest purchasing some of the supplies on your own to get a better deal on the costs.
Plan for Hidden Costs
You don’t have to watch too many home improvement shows to know that things don’t always go as you’d like them to. There is always something that goes wrong that digs into the initial budget. Planning for these incidentals can save you a lot of money and reduce the stress of a renovation. Some hidden costs of renovations might include:
Structural damage or changes – tearing down walls and removing appliances could expose problems that include damaged wood, mold, faulty wires, and a host of other issues that can’t be covered up.
Changes – sometimes things look great on paper and then when you see them in person, you don’t like it. You need to factor in the room for those times when you change your mind.
Property damage – termite or mice damage, foundation troubles, rusty pipes, if any of this is discovered during the renovation it has to be addressed.
Building code issues – all homeowners are required to keep their homes up to code. If there are elements of the property that are outdated and could pose a health or safety risk, contractors have no choice but to repair it.
Having your home renovated is an expensive but rewarding task. To ensure that you don’t break the bank trying to improve your property, it is imperative that you create a budget. Your budget should not only include things like the hourly contractor rate and cost of supplies but hidden fees and unforeseen circumstances as well. Leaving a buffer in your renovation budget will ensure that you can get exactly what you envisioned without the stress.