Are you thinking of renovating? If you last project did not go as planned, or if you are a first timer and not sure where to start, look no further. Follow these pieces of advice when planning for your next renovation and if you stick to them, then success won’t be far behind.
1. Set a Realistic Budget
There is a lot that goes into setting a budget for a renovation of your home, and it will be more than you first think. If you have a remodel and mind, but do not know where to start, check out the Houzz Real Cost Finder. This online calculator will take into account location, current stats, type of remodel, and more. For example, the average money spent on a kitchen renovation in Madison, WI is $33, 276 for a $375k home, which is higher than Middle third of $21,000. The income resulting from the renovation is on average, $130K.
From here, it is advised to make a list of essential components to the renovation. In order to stay under budget, you may not get to do every little detail that you want and this list will help keep you centered around what is important. These components are also helpful when setting a budget because you can begin to get estimates. Even if you are going to do the work yourself, it is still a good idea to get an estimate from a professional that is broken down so you can understand the costs that go into the project. With a professional there, you can ask questions and make even get some inside tips from them.
Now, the materials that you will be implementing in the renovation become important. Finding your materials early is important because you can realize the impact that the choices you make have on how much money you are going to spend.
If you find yourself have problems with these three concepts, you are not alone!
2. Avoid Structural Changes and Leave Critical Areas to the Professional
Building an addition, moving walls, or relocating sinks and stoves is the quickest way to leap over budget. These projects involve major construction and can be expensive and time consuming. Projects that lead to new electrical, plumbing and flooring work are going to be your riskiest and most expensive projects. Instead, focus on maximizing the space that you currently have.
You may decide to hire a professional, which is always recommended especially for critical areas of the home. They know how to handle the materials efficiently, work faster, and stay on deadline. You may be paying for them to do the labor, but if you choose to do it yourself, you mistakes could be costly.
3. Explore all Financing Options
If you take a look at the graph below, the top 3 payment methods for home renovations are Cash/savings then credit card and then finally a secured loan. Cash and savings on hand is expected because people plan for renovations. If a renovation is unexpected and needs to be done to make the home livable, credit cards are a way to fund the project, although good financial habits suggest that you do not spend money that you do not have.
There are secure loan options that can be beneficial by helping you achieve your renovation goals while not stretching your cash flow and savings thin. Some of the options to look into is a home equity line of credit, home equity loan, construction loan, cash from mortgage refinancing, and home improvement loan. To exhaust these options however, it may take time, but it is worth it.
4. Build in a Buffer
The bigger the renovation, the bigger the buffer needs to be. For major renovations like the kitchen, factor in money spent on eating out. If the home is not going to be livable then you may need to rent if you cannot find family or friends to stay with. If you have pets, it may be best to kennel them. All of these costs are not directly related to the renovation, but will leave you out to dry if they are not considered.
If your home is older, and you need to do some construction, make sure to be weary of any problems that come up in the demolition process. This may be another area to add more of a buffer.
5. Reupholster! Upcycle! Paint!
Before buying new new new, see if you can give your current furniture a new look. This is especially helpful with couches and chairs. If your furniture is in great shape, get it reupholstered instead of replacing it. You can still get that great fabric or color but by spending way less. There are a ton of how to videos and blogs online, and you can also get it professionally done. Before even starting to furniture shop, try to reimagine your furniture to match your renovation plans.