Now, before you go off on a rant about how foolish it is to renovate a home, stop. Not every home renovation project is a good investment—nor it is a good use of disposable income. But not every remodel project is a bad idea. .
Tip #1: Don’t underestimate the cost of renovations
From data compiled from over 2 million users’ search behaviour and project posts, TrustedPros.ca, a site that helps homeowners find and rate home reno contractors, found that homeowners consistently set unrealistically low budgets for a few of the most popular renovation projects.
For instance, the national average budget for a kitchen renovation came in at just under $14,480—at least $5,000 under-budget for the average Canadian kitchen renovation, explains Nicole Silver, spokesperson for TrustedPros. “It takes licensed electrical, plumbing and gas experts to install bare necessities in a kitchen,” explained Silver, “and these experts come at a price.” Add in the extra cost of durable or high-end finishes and budget costs start to creep up quickly.
Tip #2: Seriously consider whether or not you are over-renovating
Many homeowners are convinced that they only way to increase the value of their home is to spend a lot of money on high-end finishes and expensive home remodels. But home renovations rarely, if ever, offer a $1 for $1 return. In fact, sometimes the simplest or least expensive updates can give the best returns.
Tip #3: Do the leg-work to set a realistic home reno budget
Still, in order to avoid unnecessary or unexpected costs when it comes to home renovations, you must first start with an accurate, honest budget. Here are four tips to get you there:
1. Get multiple quotes
Never settle on a contractor before first interviewing and getting a quote. Better still, ask what their contract covers and how they handle ongoing communication and potential problems.
2. Stop comparing your home to HGTV
Nobody renovates their kitchen, never mind their entire home, in just two weeks. Yet, the home shows on TV can leave us with the impression that renovations can be done either quickly or cheaply or both. If you find your the type that likes to compare your house with the glossy mags the home reno reality shows then stop. Turn off the TV and put the magazines away. Now, consider why you want the renovation and what problem it will theoretically fix. Answer these questions and you’ll have a much better idea of what needs to be done and what budget you can afford.
3. Answer questions honestly
Are you handy? If so, you could cut some costs by doing the work yourself. But be honest with yourself: Do you have the time or the aptitude? If not, then you’ll need to pay someone to do the work. That means taking all expenses into account—not just labour and materials, but also permits, as well as additional overhead. Remember, the people you hire will make a profit. That’s their job. If that doesn’t sit well with you, consider learning how to do the job yourself.
4.Always add more
There are always extra costs. That’s because home renovation planning takes a little bit of guess work. How do you know if you have lead pipes or that your oven in a potential fire hazard? To avoid blowing your household budget, due to unexpected reno costs, add a contingency fund. Most contractors suggest adding 10% but larger projects may need a 20% contingency fund. Talk to your contractor for a better understanding of what this extra money could potentially cover.
Tip #4: Figure out the finances, first
Before a hammer hits a nail you must first decide how you will pay for your home renovation project. Like all consumer spending, paying for a renovation is best done through savings. By saving up the money, you’re more likely to stay on budget because you have more time to research costs and plan the project.
Still, if you’re seriously considering a renovation and don’t have all the money saved up to cover the costs.
Tip #5: Be patient
The final tip is, wait for it…be patient. Putting your home reno project on hold gives you more time to save up the money needed for this expensive endeavour. It also means not going into debt for an expenditure that may or may not give you a return on the dollar you spend. Finally, it avoids costly mistakes. That’s because a hasty, under-budgeted renovation can actually devalue your home and add little or no value to your home’s fair market value. And nobody wants to pay for a big blunder.