Saturday, March 4, 2023 / by David Hornick
7 Helpful Tips For Budgeting For A Home Renovation
It's fun to dream about a major home renovation and all the cool updates you'd like to do. If you're planning on listing your home among Cedar City homes for sale, you may be particularly eager to make some improvements that are likely to attract buyers.
But whether you're selling or planning to stay put with your renovated home for a few years, budgeting will be a key part of your planning. Above all, don't make the mistake of being lured into deep debt to finance your renovation. Here are 7 helpful tips to keep in mind as you plan your renovation budgeting.
Figure out how much you can afford to spend on your renovation.
Your renovation costs will depend on several things: how old your house is; how much square footage; whether or not your home is up to code; whether or not you can contribute some DIY help to the project; and what type of renovations you want to have done. It may be best to meet with a design consultant to help you with a realistic plan for your budget.
Determine how you will finance your renovation.
While it's ideal to pay for a renovation in cash, this may not be possible for you. But perhaps you can pay a portion in cash and finance the rest with a loan. However, take care that the budget fits your ability to repay a loan.
Set aside an emergency contingency fund.
You should set aside around 10-20 percent of the project's cost in an emergency contingency fund for unexpected expenses. Homeowners generally encounter these costs when materials cost more than they planned, or they discover problems that need fixing before the renovation can begin. Sometimes, homeowners snap because a renovation project might be an opportune time to correct some problem. Nothing wrong with that, but it's better if it's budgeted.
Prioritize your wants and needs.
Make a list of everything you want to be done, then prioritize. Some updates will be more important than others. Make two columns. Put your must-dos in one, and in the other, the things it would be nice to do -- if there's money.
Get some estimates.
After you've set your priorities, it's time to start calling around and getting estimates for the jobs you want to be done. This could take some time, as you should call more than one consultant. If you're planning on doing some of the labor yourself, this is the time to call for estimates on materials.
Create a spreadsheet.
Once you have your projected costs, you can create a spreadsheet to plug them in. In one section, you will costs for plumbers, handypersons, architects, and engineers: this is generally 20 to 35 percent of a renovation project. Your materials costs will include fixtures and finishes, paint, flooring, and tile, plus shipping costs and taxes. Also, include costs for new appliances. Other expenses might be your costs for living elsewhere while certain renovations are taking place, disposal of appliances, and installation and delivery.
Hire a contractor.
Now that you have a good idea of the cost and scope of your project solicit at least three bids from prospective contractors. Look for them online, and do check references, which should include customers for whom the contractor provided satisfactory work.
Our real estate agents have more tips about renovating your home so it's ready for the market. Contact us today.