Figuring out how much you can afford is the toughest part of planning a home renovation. The budget is an essential component of any plan because it dictates the scope of works that can be carried out. Very rarely do we find a client who has a literally unlimited budget and in this post, we’ll discuss the steps you need to take when creating your home renovation budget.
1. Assess Your Needs And Your Wants
You need to be clear about what you want to achieve from your home renovation. Most renovations can be categorized into two: wants and needs. Upgrading your 10-year old kitchen appliances may be considered a need while changing your polished concrete and perfectly serviceable kitchen counters to granite would be a want. Determine what your renovation motives are and then assess if you can financially afford your wants or needs.
2. Look Ahead.
When creating your renovation budget, consider how much longer you plan on living in the home. If you plan on living there for only a few more years, you may consider spending less than you would on a home that you plan on living in for 20 more years or more.
3. Consider The Neighborhood
It’s suggested for you to never spend more on your renovation than your location can support. Visit with some local realtors and check comparable sales to find out how much homes are generally worth in your area and what renovations and features home buyers value most. You don’t want to have a five million dollar home in a neighborhood with an average home value of five hundred thousand dollars since that could considerably lessen your ability to recoup your expenses when you sell your home in the future. Checking with local realtors can also provide you with ideas on which rooms to spend more on as these may be the rooms that can drive the sale when you finally decide to move.
4. Ballpark The Costs
Another thing that you would need to do is to price everything out. Ask friends and family about what they paid for a recent renovation and learn from their good and bad experiences. Visit multiple home improvement stores and find exactly the types of materials and appliances you want then compare prices and write down the best deals.
5. Hire A Professional To Give You An Estimate
If you’re a home renovation novice, it’s best to hire a professional contractor or estimator to help you determine what materials, labor, and time estimation will be appropriate. Beginning with accurate estimations will help you budget with realistic goals, instead of guessing. We suggest getting estimates from several contractors to compare and contrast each professional’s calculations.
Get recommendations for at least 3 contractors from your friends, neighbors and other tradesmen who you trust. You can also get recommendations from your architect as they may also have contractors that they like to work with. For more tips on how to find the right contractor for your build, check out our article on How To Choose Your Home Builder.
6. Prepare For Contingencies
Most remodeling experts suggest taking the winning contractor’s bid and padding the budget by 15 to 20 percent to cover the unexpected. With construction being what it is, there are always situations that arise that will increase the cost. Those are hard to foresee at the beginning of construction so it’s always best to come prepared. For example, your contractors might start out opening a ceiling for replacement only to find out that you have rotten beams, which also need to be replaced. If you already have a contingency budget prepared, you can still continue with your project without having to come up with more money for your build.
If you find that the 15% to 20% contingency budget isn’t within your ability to pay, you can either find ways to scale back your project or find other ways to cut costs.
7. Set Priorities And Trim The Project To Fit Your Budget
If you find that your home renovation dreams will cost you a lot more than you anticipated, you may find opportunities to reduce costs by changing the scope of the project. Enlist your contractor for suggestions on how you can cut costs. This way, he’ll be an ally in helping you stick to your budget. For example, your contractor might suggest using laminate countertops instead of granite or to trim your bathroom addition from 100 square feet to 70 square feet to cut costs. You may even save money on surcharges and fees by buying most of the materials and appliances yourself.
Beginning with a realistic budget can minimize the stress considerably. By determining what you can spend ahead of time you can take some of the pressure off as you shop and compare.
At Built By La Sala we are budget led and organised from day one. We will work with you to create the home of your dreams while sticking to your budget and timelines. So if you’re one of the lucky few who’s be able to undertake a home renovation, contact us now to start the process.