Renovation plans for a home will result in a big financial commitment for a homeowner. The cost of a home remodel is included in the resale value of the home. Home renovation plans need to include costs for the work and how the work will be financed. Review a few tips to help you budget for a remodeling project in your home.
1. Wants Versus Needs
The remodeling project for your home is typically based on a want or need. This decision often dictates the total cost of the project. A want may include updating to stainless steel appliances or having granite countertops.
Replacing old single-pane windows in your home is often considered a need. If the want or need is determined during the planning stage, then the budgeting process will be easier.
2. Time in the Home
Recouping the cost of a renovation project is based on the amount of time homeowners plan to remain in the home. This is a big consideration when budgeting for renovation plans as homeowners may need to stay in the home for up to 10 years before thinking about selling. Selling soon after a remodel may lead to a loss on the cost of the remodel if the home is sold at a reduced price.
3. Set a Goal
The goal for a remodeling or renovation project will include the end result and completion time. If your renovation project falls behind schedule or plans change, then the budget may be affected. Planning the renovation project will need to include the goals you plan to achieve. This allows you to plan for all the options and accessories you want to include in the finished room.
4. Start Small
The size of the renovation will dictate the amount you will need to budget. If you are short on time or need to have a project completed on a specific date, then a small project can be planned. You are able to set a smaller budget and learn more about the remodeling process. This will include estimating material cost and labor. The plans for smaller renovation projects can then be applied to a larger project. A homeowner who is considering a smaller project may choose to remodel a guest bathroom over a kitchen.
5. Professional Estimate
Determining how much to budget for a renovation project is done by obtaining an estimate for the total cost. The best way to do this is to hire a local contractor who can analyze your plans and calculate your cost based on various factors. One thing to keep in mind is that estimates are for the work and not the costs for accessories, such as any appliances and fixtures. If you do not obtain an estimate, then your project may have a good chance of going over budget.
6. Cost Overruns
Many projects can easily go over budget due to unforeseen problems or poor planning. You can include a buffer in your budget for extra costs that are unexpected. This can be done by setting aside up to 10 percent of your original budget.
Still, going over budget due to making the wrong design choices or changing our minds once a feature has been installed can be reduced. Clashing or awkward colors, textures and/or design elements are often the reason for reorders and, thus, time wasted in waiting on these new items to arrive. We found this fantastic 3D kitchen visualization tool by Arch City Granite & Marble that can offer you the opportunity to try all kinds of different combinations of countertop materials against different cabinet colors and backsplashes as well.
The amount of money for a renovation project needs to be determined prior to finalizing plans. You can finance a home improvement project in a number of ways. The most common option is to obtain a loan on the equity of the home. Another option is to look into a home improvement loan. If loans are not the best option, then alternatives can be considered. One way to free up money that can be used for a home renovation project is to use the cash value that has built up in a qualified life insurance policy.