Properly setting your budget can help make your home remodeling project a rewarding experience. Every homeowner who has gone through the remodeling process will agree that the key factor to keep in mind is the scope creep. This refers to the unintended growth of a project, due to poor planning. The first step in the remodeling process is having a clear set of priorities. You need to know why you are remodeling. Examining your reasons and overall project ideas can help you realize that you only need to redecorate rather than to fully remodel.
If you want to increase the value of your home, first talk to a local realtor about home improvements that translate into the greatest return on your home investment. Sources state that the following renovations (with their average costs in parentheses) recoup the largest percentages at resale:
- Wood deck addition ($10,601): 82%
- Vinyl siding replacement ($10,256): 81%
- Minor kitchen remodel ($21,246): 80%
- Two-story addition ($146,538): 71%
Next it’s time to figure out the amount you can spend. Make sure you know how much you have in short-term savings, like money market accounts, savings accounts and CDs. Think about financing if you know the project will exceed your savings. Consult your personal or family budget to see the monthly leftover amount that could be applied to a home equity loan or refinanced mortgage payment.
Compare and record the best deals of materials and appliances that you will need at home improvement stores and write down the best deals. This way you’ll have exact figures rather than ballpark estimates. The biggest question to consider is: contractor or do-it-yourself? The benefits to using a contractor are faster completion, professional expertise, and knowledge of building codes and permits. Doing it yourself is usually cheaper and gives you greater flexibility, if you don’t make mistakes. Even with a contractor, you can save money by buying/salvaging most of the materials yourself, if your contractor allows it. Add 20–30% more to your total budget for unexpected costs and errors.
Whether you decide to go with a contractor our do it yourself, your detailed budget should include the following categories:
- Labor (with a contractor)
- Tools and equipment (do-it-yourself)