Home is where the heart is. Unfortunately, home is also where the wallet is. When it comes to home improvements and renovations, costs are one of our primary concerns. Yes, we want it to be safe and yes, we want it to look nice. However, most of all, we want our home projects to come in under budget.
For great tips on how to manage the fees and costs associated with your home improvement project as well as ideas on lowering your expected budget, keep reading.
1. Understand the True Cost of a Loan
If you’re planning to take on debt to finance your home improvement project, be sure to include the total cost of that debt in your project budget. Remember, you are taking on this renovation to build and improve your nest, not lose it.
So, before signing off on any loan agreement, make sure you understand the terms, the interest rates, the repayment schedule and all the hidden service fees.
Also, always be wary of companies that are not affiliated with a trusted bank and that require you to pay up front fees and service costs. Consider these to be warning signs.
2. Don’t Overbuild
As part of the true cost of a home improvement, think about how your home renovation project will increase the value of your home. If you’re renovating as an investment with the idea that your renovations will increase your home’s value, never overbuild based on the values of other homes throughout your neighborhood.
For example, if your house sits on a block where most of the homes are one-story, two-bedroom bungalows that sell for $70,000, then you’re simply not going to get back the investment expense of an extra story and marble floors.
3. Inflate Your Budget
Whatever your own estimates are or your contractor quotes you, always expand that budget by about 20%. Inevitably, you’re going to need that extra 20%, and it’s better to be prepared for that expense than to be caught by surprise and without sufficient funds to complete the project.
Remember, projects often fall behind deadlines, supplies come in at higher costs, the weather doesn’t always cooperate and things can just happen that cause your budget to go beyond what you expected. That said; never tell your contractor that your budget is actually 20% higher. Keep that figure to yourself.
4. Budget for the Extras
Often, home renovators forget to budget for the added extras like new curtains or new doorknobs. Once you’ve set your budget, go back through your list of expenses and make sure that you’ve included everything, right down to the new mailbox that you’re going to want to put at the front of your newly renovated home.
Budgeting for a project can be a cold, calculating process that drives some to denial and consequently, later in debt. Don’t let that be your experience. Be realistic from the onset about projected expenses and your post-project enjoyment of your renovated home will be all-the-more heightened.