Brought to you by HBA Platinum Industry Partner, ProSource Wholesale
So, you decided it’s time to finally tackle that home remodeling project, but you’re wondering where to start? Before the first crowbar hits a wall or old cabinet comes tumbling down, the first tools you should be reaching for would be pen, paper, and a calculator.
Having a good plan with solid budget expectations will save you a lot of time, energy, and costs in the long run. Here are 4 tips for creating a home renovation budget plan.
Tip #1: Know the Value of Your Home
Before you can create a budget for your home remodeling project, you will want to have a good idea of what the current value of your home is in the market. If you’ve recently had an appraisal or decide to get one, that will be the most accurate way to understand what your home is worth before you start renovating.
If you can’t go that route, you can also research similar homes in your neighborhood that have recently sold and then use those selling prices to determine the average price per square foot for those homes. Then you simply apply that average price per square foot to your current square footage to get the potential selling value of your own home.
Why do you want to know the current value of your home? Because a good way to set a budget for a home remodeling project is to aim for a budget that represents between 5 to 15% of the total value of your home. Depending on how much equity you have built up in your home from years of making mortgage payments will also let you calculate whether you can aim for the higher end of 15% and still be in the ballpark of what the market would bear if you had to sell the house down the road after the renovation.
Tip #2: Costs for Different Spaces Vary
It’s important to understand what rooms you plan on renovating and how costs can vary by space. Moving a few walls around to make an additional bedroom or add an office space may be far less expensive than renovating a kitchen, living room, or bathroom.
Kitchens for example are going to have more material pieces involved including countertop surfaces, tilework, cabinetry, and appliances that will likely come with a healthy amount of plumbing and electrical rework. Kitchen renovation costs can vary greatly depending on the size of the space and materials selected. Living room and bathroom space remodels can also run between $100-$200 per square foot so it’s important to have a realistic expectation for the spaces you plan to renovate and doing your homework ahead of time is a good idea.
Tip #3: Weigh your Needs and Wants Versus the Budget
One of the toughest steps in a home renovation project is making sacrifices. Even the best laid budget plan will come with unexpected costs and things you may not have anticipated.
Remodels are just different than building a new home because when things start getting ripped out to make way for new spaces, sometimes things are uncovered that need to be addressed.
One way to plan for the unexpected is to make a list of all the things you want to do and then rank them from “must haves” to “nice to haves”. This way if you get into a spot where you need to make cuts, you can look through your list to see what you could live without if needed.
Tip#4: Consult with your Contractor or a Trade Professional
If you are going to work with a contractor to handle the home renovation for you, you will have access to a lot of knowledge. They can really help you set a realistic budget for the spaces you have in mind because they do this daily and can likely give you safe ballparks for cost per square footage based on the work to be done and materials you would like to use in those spaces.
If you are not working with a contractor and plan to sub the work out yourself, you can work ahead of time with trade professionals on the materials you want to use in the renovation to determine costs before renovation even begins. This will allow you to pick out tile, wooden floors, cabinets, appliances, fixtures and more so that you have a good idea of where you will land on costs which helps you be more accurate with your budget expectations.
Talk with an expert today.
Here at the Home Builders Association of Greater Baton Rouge, we are fortunate to work with trusted partners who are experts in their fields. If you are looking to source materials for your renovation project, we would recommend working with one of our partners like ProSource Wholesale. They have a wealth of knowledge when it comes to home renovation and experts on site ready to help you with your remodeling needs. Contact them today to get started.