How to Plan a Renovation Budget

If you’re a fan of renovation television shows, you know they always go over budget…always! Having personally done a renovation, I can attest to this personally. There will be unexpected developments pop up left and right! How do you plan for these and not break the bank? Great question! That’s what we’ll attempt to answer today. There are several factors to consider when beginning the planning process. We’ll touch on the top three (in our opinion of course).

IS THIS YOUR FOREVER HOME?

How long do you plan on spending in this home after your remodel? If it’s a short-term situation, you may want to consider keeping the budget focused on what it takes to help sell the home. According to an article on FinancialSamurai.com only 37 percent of Americans have lived in their homes for more than 10 years, with a median duration of 5.9 years. If you think you’ll be in the home for more than 10 years, it may be worth the extra budget to have exactly what you want!

WHAT CAN THE NEIGHBORHOOD SUPPORT?

My family and I were considering a major addition to our home about 15 years ago when a very wise real estate agent friend reminded me that it’s important to keep in mind the neighborhood comparable homes. He knew that the cost would be significant and he was worried that if we sold, we couldn’t get what we needed to recover the cost. He said, “it doesn’t matter if you put a million dollars into your home, if the neighborhood comps are $500,000, you won’t get much more than that back.” The neighborhood must be able to support the added expense in case you decide to sell. A recent article on Angie’s List said, “Consulting with a licensed real estate agent about your neighborhood, your home’s features and the planned project can help determine if the project is the right fit.”

HOW MUCH TIME DO YOU HAVE?

Time is money. Not a new saying by any means! But, it is very relevant when it comes to planning a home improvement project. If you’re adding custom kitchen cabinets and must have them in less than 4 weeks, you’re going to pay considerably more than if you give the contractor more time. The contractor will likely have to push other projects aside to get to yours…and that’s not cheap! They have other clients that are depending on them as well. Understanding the scope of work will help determine the time needed as well. Building something like custom cabinets will take time. A painting project may not take as long. Have a reasonable expectation of project time when speaking to your contractor during your planning process. It will make things go more smoothly!