Dreaming of remodeling your home? You’re not alone. Real estate studies have shown that spending for remodeling projects has increased by as much as 7 percent this year.
Why are so many homeowners buying up home design magazines and binge-watching HGTV? The healthy housing market is making them want to invest even more in their homes – fixing things that have been on the list for months, and improving things that have driven them crazy since they day they signed on the dotted line.
It could also be that people simply don’t want to move. They like their neighborhood. They enjoy their community. They have easy access to the most important things in their lives, and they don’t want to give that up to upgrade their homes.
So a home remodel simply makes sense.
There are numerous benefits to remodeling your home. You can improve aesthetics, increase safety, add enjoyment, even upgrade your comfort. You can also increase the value of your home, with a return on investment of up to 80 percent, depending on the room.
Today’s buyers want the latest and greatest technology and functionality in a home, and they aren’t afraid to pay for it. When you’re ready to sell, many buyers are happy to see a turnkey home before them, knowing all they have to do is hire a moving company, move in the boxes, and begin living in the home of their dreams.
And they are willing to spend the money.
But before you get to that point, you have to pay for the remodel. Which leads to the all-important question that may have stalled your action plans up until this point: What is it going to cost you?
Do a search online, and you’ll find “averages” for every room in your home. But let’s face it, averages aren’t going to tell you how much you’ll spend. Because every remodeling job is different. The term remodel means something different to every person searching out the process.
You can remodel a kitchen by changing out the appliances. Or you can remodel a kitchen by completely gutting the entire room.
Different goals for each homeowner leads to different outcomes in the materials and processes they choose.
It’s hard to start a project without a number in mind – that works for both you and the remodeling contractor you hire. You need a starting point before you ever begin.
Establish Your Budget Early
We’ve all heard the horror stories of budgets blown early on in the remodeling process. The homeowners hold back what they were truly willing to spend. And when problems arose, and changes had to be made, no surprise, cost issues came to a head. It’s difficult to arrive at the destination if everyone isn’t on the same path.
Without knowing a budget range, you can meet with a variety of remodeling companies and receive rough ballpark estimates. But if the design firm doesn’t understand what your limits are, these figures can often be double, even triple what you expect.
Never leave the playing field open. If you provide your expectations from the beginning, you’ll receive the greatest value for the money you are willing to put into the project. Your design team won’t have to second-guess where you’ll be willing to spend … and where you won’t.
Make Sure Your Budget Is Realistic
When most homeowners search online for how much a remodel will cost, they want numbers. But it would be problematic for any design firm to list numbers as concrete amounts.
Every remodeling job is based on a list of factors that can influence it: location, neighborhood, level of finish, options chosen, complexity of construction, and so on. It depends as much on the selections you make as it does from what currently resides in your home.
Also, keep in mind that pricing can change significantly from year to year. If your neighbor had a kitchen remodel a few years back at a certain price, your figures could be off due to a variety of things, including material and labor costs.
If you have an “all-in” number, an absolute price you can’t go beyond, it’s best to subtract about 20 percent from that number as your budget limit. This will give you a cushion for price increases during the process, changes made in the fixtures chosen, unexpected snags that you face along the way. Construction can be a complex process, and there are almost always things that happen along the way. This contingency will provide a buffer along the way.
Understand Your Contract
When a remodeling contract is given, it includes a series hard and soft costs. Hard costs include things like construction materials and fixtures required to build the structure. Soft costs include fees for permits, designers and consultants.
Both hard and soft costs can be changed along the way. It all depends on the work requested, and the process it takes to put the changes in place. A lot can happen along the way.
If you’re at the bidding point, keep in mind that contractors quote differently. Some contractors provide a rough guide during the planning and will include only hard costs. This generally will not include things like appliances or soft costs.
If you aren’t sure, ask. It’s better to understand the entire bid before you sign, rather than be surprised with a large bill down the road.
What If Your Budget Is Blown?
Occasionally things don’t go to plan. It can be frustrating to hear that something you’ve reached for and planned on is no longer within reach. That’s where flexibility can help.
There may be opportunities to reduce costs by changing the scope of the project. Changing the kitchen layout rather than moving an outside wall, for instance.
There may be opportunities to wait before starting a project and gathering more resources before proceeding. If your remodeling dreams truly are for your dream kitchen, for instance, waiting to get what you want won’t leave you disappointed in the long run.
Whenever money is the topic of discussion, there is the potential for some uncomfortable conversations. But the more you understand what you’re dealing with, the more flexible you become throughout the process, the less stressful it will be when changes need to be made.
How solid are your home remodeling dreams?