One of the biggest mistakes homeowners make is not setting a realistic budget for their home improvement project. It can lead to disastrous consequences, like a project that takes longer or ends up costing more money than expected. Renovation projects are one thing but worrying about repairs and replacement costs is more stressful to your budget. Home warranty costs generally make up for that stress providing peace of mind when things break down.
There are many factors that go into creating a budget for a home renovation, but some of the main ones include:
1. Don’t Rely on a Contractor or Retailer to Tell You How Much a Project Will Cost
Home improvement projects can be expensive, and you should always get estimates from several contractors before hiring one to do the work. You can also ask for references, and look for a contractor with years of experience. Punctuality is also an indicator of how professional a contractor is and can help you determine if they are reliable.
There are plenty of low cost high impact improvements you can do to make your property more marketable and desirable. A fresh coat of paint is inexpensive and can really make a room pop. Adding crown molding is another cheap way to improve your home’s design and add value.
Try to pay in cash whenever possible to save on the interest you would pay if you take out a loan or put the project on a credit card.
2. Do Your Research
One of the best ways to lower your project budget is by researching the actual costs of materials and labor. You can use online calculators, talk to contractors, or visit home improvement stores to get a realistic idea of what the renovation is going to cost. Once you have an estimate, make sure to leave some wiggle room to account for unexpected expenses. According to Zillow, unforeseen problems (such as old wiring that needs to be updated) can add up and increase the total renovation cost.
Also, try to pay for your home improvement projects with cash rather than taking out a loan or using a credit card. This will save you money on interest charges. If you need to take out a loan, be sure to consider the options available that can offer the lowest interest rates.
3. Be Flexible With Your Timing
While it’s easy to get engrossed in the excitement of your renovation project, you must remember that it’s best to pace yourself. Rushing through a home improvement project can end up costing you more in the long run.
For instance, rushing through a kitchen or bathroom project can lead to costly mistakes, such as incorrect measurements or rushed work. You may also discover unexpected costs, such as unforeseen damage or extra materials that are needed to
complete the job.
In addition to being flexible with your timing, you should be flexible with your budget. Try to get an accurate estimate of your renovation costs before you start the project, preferably during design. This will help you develop a budget that’s realistic and includes material prices, says Goldman.
4. Do It Yourself
It is important to know how much things will cost before you begin a home renovation project. Getting cost estimates from contractors and other reputable sources is the best way to get an accurate picture of what a home improvement project will entail.
It’s also a good idea to add some wiggle room to your budget. That’s because unexpected costs can pop up that weren’t included in your original estimates.
It’s also smart to look for ways that you can do things yourself instead of hiring a contractor. This can help save you a lot of money in the long run. For instance, you could paint your own walls or learn to install tile. Another great way to lower your project budget is to pay in cash rather than using a loan or credit card. This will save you on interest charges.
5. Don’t Overspend
It’s easy to get caught up in the excitement of a home improvement project and overspend. Adding custom work, luxury elements or replacing a hardwood floor with laminates can all cause projects to exceed their projected time and money goals.
Choosing a contractor that isn’t properly qualified can also push homeowners over their renovation budgets. Not only will hiring an inexperienced contractor result in shoddy work, it can cause delays that push costs higher than expected.
Taking the return on investment into consideration can help with developing a renovation budget. For example, refinishing old hardwood floors is an inexpensive update that can provide a high ROI by increasing a home’s value. So can painting a room or replacing doors and windows. These types of improvements are likely to add a large amount of value to your home when you are ready to sell it.