There are a lot of reasons you might buy a home. Maybe you love the kitchen or the feel of the master bathroom. It could be the big backyard that gives your golden retriever a lot of room to run. And the schools could be great as well.
As many great reasons as there are for loving any particular home, they’re almost never perfect. Maybe you’d like to knock out a wall between the living room and kitchen to create a more open floor plan. Maybe it’s a matter of putting a skylight in the bedroom so your kids can sleep under the stars. You might want to redo that ugly, lime green bathroom that’s straight out of the ’70s.
Before you start taking a sledgehammer to that piece of drywall that’s been bugging you all these years – I would imagine there’s nothing more cathartic – let’s slow down and think about a few things to consider in the course of the renovation process.
You really need to determine your goals at the onset, because it’s going to drive everything else you do. The first thing to figure out in terms of goal setting is who this is for.
If you’re looking to sell your home, think about renovations that will have the highest impact on your property value. For instance, renovating a kitchen or bathroom adds the most value because these rooms are commonly used. Many buyers also don’t want to put in their own money to renovate. You might also consider updates with classic touches instead of crazy paint colors.
On the other hand, if you’re only looking to do the remodel for your own satisfaction and are planning on sticking around for a while, decorate to your own taste. Make this your palace.
One of the first remodeling considerations should be what you plan to spend. This determines the scope of the project. It may also help with determining if the renovation is cost effective compared to other options.
Establish how you would finance the project, whether it’s from your personal funds or tapping into your equity to do a cash-out refinance. Make sure you have everything laid out ahead of time to minimize your chances of going over budget.
What needs to be included in your budget? There’s the obvious, like materials and labor. Don’t forget about the cost of any required inspections after a renovation to make sure it’s in compliance with local codes.
What might not be obvious are costs that aren’t actually related to construction. If you’re having your kitchen redone, you’re not going to have a space to cook meals. Be prepared to eat out a lot. If the remodel is big enough, you may have to budget to spend a few weeks in a hotel.
We’ll go into more of the details for determining the cost of your project below, but keep it in mind throughout the planning stages. You may find it more cost-effective to move into a new house instead of renovating the old one. The inconvenience of having your life upended might also push you toward buying new.
The flip side of the coin is that across the nation property values have been on the rise, up 3.37% over this time last year. Values can vary widely, even between neighborhoods, so pay close attention to the market in your area to see if renovation might be a better idea.
Cost of Materials
Once you know how much you want to spend, it’s time to budget in the cost of the materials. The hard part can be getting an accurate estimate of what’s required for the job. How much hardwood or wallpaper will be needed for your particular project?
Thankfully, there are project calculators that automatically estimate the necessary materials for just about any project. Next you’ll figure out the type of material you want. If you’re looking for something durable, a porcelain countertop may work better than the standard ceramic one. While you want to use good quality materials, there is one other thing to keep in mind.
If you’re selling your home soon, you could put hardwood floors, granite countertops and professional-grade equipment in a brand-new kitchen. However, you may not see the immediate return on investment that you expect, because appraisals that determine house value rely on looking at comparable properties in your area. In order for you to realize the value on that kitchen upgrade, a neighbor has to have a similar upgrade to their kitchen and sell their house for more because of it.
As Jamie Chapman, a director of solution consulting at Quicken Loans, puts it, “You don’t want to be in the castle in the village of bungalows.” In order to get the most back from your renovations in a sale situation, keep up with the Joneses, but don’t outspend them.
If you’re going to be there for a while, it’s important to do whatever your heart desires (or at least as much as your budget allows). You have to live with it, after all.
Before looking to hire anyone, determine if you can save some money by working on projects yourself. If it’s a small update, you may be able to pull it off without any outside help. Need an idea of what you can do yourself and what might need to be left to the pros? This post on DIY bathroom updates might get the juices flowing.
There might even be a way to save money by you taking care of certain parts of a bigger project before bringing in the contractor. A lot of us aren’t handy enough to build anything from scratch, but there is the tear-down process in any remodel. As long as you’re careful not to mess with any loadbearing walls, you may be able to grab a sledgehammer and tap into your appetite for destruction while playing the song “Welcome to the Jungle.”
Labor costs can vary based not only on the scope and technicalities of the work being done, but also where you are in the country. HomeAdvisor has a good tool for estimating the cost of many projects and renovations. The difference often comes down to what labor rates are in your area.
Finally, when it comes time to actually hire a contractor, it’s important to consider the following:
- When soliciting estimates, make sure you and the contractor get in writing what is and isn’t included in any quote. That way, you’re both explicitly clear on the parameters of the project. They should itemize the quote for you.
- You shouldn’t always go with the cheapest option. Sometimes you get what you pay for.
- Make sure the contractor is licensed. This gives you recourse options if something goes wrong with the work. You can appeal to the licensing board.
There are many factors that go into hiring the right contractor, but the bottom line is to make sure it’s someone you feel comfortable with. Check online and ask friends and family. Make sure to see pictures of their work as well.
If you’re looking to renovate, now you have a place to get started. Any questions? Let us answer them for you in the comments.
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