Sticking to a budget is always a challenge, but creating one for a project you’ve never done before is a bigger challenge. That’s why, when it comes to planning home remodeling costs, having a budget requires detailed planning and research.
How much should you spend on home renovation?
To get a rough idea of what your budget should be, experts suggest that you consider the value of your home and never spend more than 15% of its price. If you spend more, it means that you are using materials or finishes that make the remodeling more expensive, but it will not proportionally increase the value of the house.
Also read: Remodeling that adds value.
Determine how you will pay for the project, to start defining the amount available. If you are going to use a loan, first secure the amount the institution will lend you.
Build your remodeling budget
Once you know how much you can spend, set aside 20% of that fund for unexpected expenses. This is important. Something will go wrong or cost more than originally anticipated. By setting aside a percentage before you start, you know you’ll have the funds available to finish the project no matter what happens.
Once you’ve decided how much to spend, follow these steps to create a detailed plan and budget:
Prioritize your remodeling needs
The easiest way to stay on budget during a renovation is to know exactly what you want. Create a list of everything you’d like the project to include and then separate the items into wants and needs.
Think about the right order. There’s no point in changing the kitchen countertops if you know you’ll probably need to reface all the cabinets later on. Doing things in the right order saves time and money in the long run.
Determine what is urgent and what changes could wait a few months so you don’t decapitalize yourself.
Create a remodeling plan with costs
This document should be as detailed as possible. It includes everything from paint, handles, faucets, tile, flooring, to those little add-ons like sandpaper and brushes.
It also includes installation costs and if there are any delivery costs, in the case of bathroom and kitchen furniture. Keep in mind that labor generally represents 20 to 35 percent of the project budget.
Factor into this budget the expenses you will incur during the project to continue your daily activities. For example, the costs of living without a functional kitchen.
The level of detail and accuracy in this document will give you clarity and allow you to communicate your budget and goals to the contractors.
Request bids from contractors
Now that you know what you need and what you can afford. It’s time to find a contractor who can accomplish this project within budget.
Compare bids from at least three companies to accurately compare costs.
When choosing a contractor:
-Check their references.
-Be very clear about the remodeling project and budget.
-Make sure the contractor understands the needs and has a clear idea of how to prioritize each stage of the project.
-If a contractor’s bid is far below the others, don’t consider it. Cheap labor sounds attractive, but it opens the door to mistakes that can cost more.
Once you select a contractor, review the project plan and budget together to see if there are any costs you have overlooked.
Take their comments into account to make final adjustments before work begins.
The remodeling that is right for you is the one that does not require complicated changes, where your budget will really be reflected in a house to your liking and that in the future, when you want to sell, you can take advantage of those improvements.
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