Tips to Help You Create the Right Budget for Your Home Renovation
It’s easy for a homeowner to feel overwhelmed by the challenging task of home renovation. Many people think that their makeover needs to be new, bold and big. Shows like “House Flippers” and “Extreme Makeover” have set high expectations. However, your home refurbishment need not be grand. Sure, it’s important to do the job right, but you can do it with a small budget.
In this article, we help you create a practical budget for your needed property renovation. You may want a complete home overhaul or to simply remodel and revamp your bathroom or kitchen. We offer useful tips to assist you without creating a hole in your wallet.
The main rule to remember about home renovation is that you shouldn’t spend more than the potential value of the place you’re refurbishing. Each area in your residence has a particular value percentage. For instance, your kitchen can account for 10 to 15% of your home’s market value. Therefore, calculate the area’s value before spending more money to improve it.
Get Rates from a Contractor
Contact an experienced contractor and ask them to quote the price for the renovation. The contractor will give you an ideal quote for the expenses needed – from materials to manpower. Hire a contractor who can work within your budget.
Create a Realistic Budget
Do not make the mistake of underestimating the amount you need for the work. Of course, you wish to revamp your home at the cheapest possible cost but will your budget be enough for the renovation requirements? Therefore, create a realistic estimate and add some buffer to each cost so that you don’t end up under-budgeting.
Stick to Your Budget
Try to remain within your budget and financial plan. You have created a specific dollar amount and scientifically estimated a realistic budget. Adhere to it and don’t change plans midway through the project as this may lead to extra expenses. Avoid the temptation to include a small side project. If you have some money remaining, you can use it to pay for the side task after the main renovation has been completed.
Give Specific Instructions
Communicate clear instructions to the contractors about the work need to be done. Be aware of the requirements of the renovation project, otherwise you may get a vague quote that includes upsells.
Begin Planning Early
Mid-work alterations can mean changes to your budget. Therefore, plan the smallest details early with the contractor. You can also visit hardware stores to check if you can get any discounts on the items needed for the renovation. Create a spreadsheet with the prices of all the required items so that you can track the costs.
Try to Get a Loan
Check if you can get a loan for your dream renovation. Consider options like a home equity loan, home equity line of credit (HELOC), cash-out refinance, or refinancing. Assess all available choices before making your decision.
Plan for Unexpected Changes
Prepare a buffer for hidden expenses. Budget flexibly to account for unanticipated developments like changes in your plan, bad weather, maintenance issues, etc. Smart budgeting can help you avoid stress and be prepared for any eventuality. Provide a buffer of about 20% more in addition to the budgeted amount to meet any emergencies.
Keep your financial health in mind over the long-term. Spend only as much as needed for your home renovation and keep plenty for the future.