Remodeling your home is one of the best ways to not only make it your own but to increase its value. In the last year our home has appreciated substantially in value due our continued effort at modernizing and updating every aspect of the home. In all of our projects that we have taken on we have only gone over our budget once. Here is how we stay on budget.
Over half of the time that we spend on a remodel project is not time swinging a hammer. It is time spent meticulously planning what we are going to need and what the costs are for the materials. For instance on our living room remodel we priced out the cost of drywall, wood trim, and paint months before we began the project. We had three electricians come and give us estimates for the lighting we wanted to add. Also we decided to install a in wall surround sound system so I placed all the components I was going to need into my amazon cart.
My favorite way to cost estimate is to figure out what materials I will need and then to go to the home improvement store and take pictures of the item and the price tag. This way I then have all the information I need to get a pretty close estimate of the total cost. If you are unsure of what materials you are going to need there are many YouTube videos that will walk you through most remodel projects.
Once you figure out all of the big ticket items and some of the major material costs go ahead and give yourself a nice big contingency fund. There are going to be lots of things that you have to deal with once you start opening up walls. For us we discovered some old electric work we had to remove (luckily it had long been disconnected). I like to take the big costs and add 20% in order to cover all the small things that are need for a project such as screws, sandpaper, paint brushes, etc. If this is your first remodeling project it might even be a good idea to go higher with your contingency fund.
This is single handedly the best way to save money on a remodel project. With all of the YouTube videos out there no one has an excuse when it comes to learning how to take on DIY projects. If you are new to DIY you can take classes at most home improvement stores. If you need help on a specific topic contact your local technical college for course info. The right tools will always pay themselves off.
Hire a professional when needed
When in doubt or doing something you are uncomfortable with HIRE A PROFESSIONAL! Personally I will not attempt any projects involving electricity. I am fortunate to have friends who are in the various trades that do fantastic work.
Some good advice to follow when hiring a professional:
- Ask for recommendations from friends, colleagues, or use Angies List for reviews.
- Get multiple estimates! I like to get at least 3 for every project.
- Do not always accept the lowest bid. I have found that the cheapest is not always the best and the chances of them nickel and diming for any minor change is much higher.
- Do not accept any bids that require full payment up front! Many professionals will ask for an initial payment to cover materials at the beginning and then full payment after the work is done.
- Make sure anyone working on your home remodeling project is insured!
- Read the fine print of any and all contracts
Do not skimp on finishes
Halfway though a remodel is not the time to find out that you have no money left. You really do not want this to happen when you are working on the only bathroom in your house. No matter what you do though, do not sacrifice the quality of your finishes. By doing this you can easily erase the value you are adding to your home by not using materials that are comparable to the ones in other homes in your area. When in doubt check out some of the homes that have been listed for sale in your area. See which ones have the highest prices and compare them with the lesser ones.
Build equity by remodeling
Recently my fiancé and I invested a little over $1,000 into the landscaping in our front and back yard. She had a hard time wrapping her head around the number mostly because we are not known to have green thumbs. While this project has not necessarily given us the largest return in equity it has substantially increased the curb appeal. It has also maximized our enjoyment of our backyard.
At last look our home value has increased approximately $50,000 since we purchased it. That is far more money than I have put into it. Currently we are starting to budget for our kitchen and master bath remodel and it looks like I might be calling a few favors in for all the labor. Just remember any remodel project worth doing will increase your homes value. Good luck!
Anyone taking on some DIY home renovations? I would love to hear about ways others budget and save.
Check out my article on 18 Months of Home Ownership