When creating your budget for your renovation, the absolute, most important thing to remember is – be realistic. It’s important to have a clear plan for your renovation based on your specific needs. Really examine your space, and get a clear understanding of what you expect to achieve from your renovation project. While it’s impossible to give a firm estimate without an in-person consultation and a bit of research, you can get a better idea of what you should budget if you know what to focus on. Here’s what you should consider when estimating the cost of your renovation.
If your renovation project involves structural changes, you will need to collaborate with a few professionals. Consultations with an architect, contractor, and perhaps an engineer, will be needed to maintain the structural integrity of your home while adhering to local and municipal building codes. You will also need to work with your city’s inspectors for your construction, plumbing, and electrical clearance.
Do Your Homework
It’s important to construct a materials list that includes everything needed for your home renovation project. This should include everything from lumber and nails to fixtures and tile that may be needed for your project.
You can visit a local lumber yard or home improvement store and take a look at the pricing for the items on your materials list. This is a great way to get a more comprehensive understanding of what the material’s cost of your renovation will be.
Consult with Professionals
When planning a home renovation—regardless of size—it’s essential to consult with a professional. Consult with multiple contractors and ask for detailed written estimates with a breakdown in the cost of your renovation. This gives you the opportunity to compare costs and included services between contractors.
It’s important to find a qualified and experienced contractor to complete your renovation that you feel comfortable working with. Be sure to personally verify your potential contractor’s references, insurance coverage, and other credentials.
Expect the Unexpected
Make sure your budget includes a backup plan in funding. Overspending and unexpected extras added on top of the overall cost of your renovation is common during a project, so it’s important to plan for the unexpected. Planning for potential and unforeseen issues during renovations can prevent the need for seeking additional project funding along the way. While planning the budget for your home renovation, adding 10%-20% to your final budget as a contingency will give you some additional coverage if you exceed your budget.
Find Your Funding
Most homeowners won’t have the cash on hand to fund such a large renovation, so it’s important to consider your funding options carefully. If you are considering a renovation loan, you do have some options. Here are the basics:
- Home Equity Line of Credit – Also known as a HELOC, this type of loan is similar to a credit card. After approval, you are given a credit line that you can withdraw from as you need it. There may be a mandatory amount that is pre-set for your initial cash advance, as well as, a pre-set minimum amount for each withdrawal.
- Home Equity Loan – This type of funding is simply a lump sum that is drawn from the equity in your home. This amount is paid back similarly to the terms of a traditional loan.
Once you have these basics covered, you should be ready to get your renovation program off to a good start.