Here are 5 easy ways to take the headaches out of the budgeting process and ensure you get the most bang for your remodeling buck.
1. Don’t be afraid to start with a ballpark estimate
Homeowners without any construction or renovation experience are often reluctant to throw out an initial number for fear of being “way off” in their approximation. But the thing is, it’s okay to be way off as the whole idea here is to get a starting point to work from—not to pinpoint the final bill on the first go around.
On average, renovations run between $150-$250 per square foot, so be honest about how “nice” you plan to go and work out a number. Perhaps go a bit higher if you know you’ll be looking to do a few “luxurious” upgrades and a bit lower if you’re the DIY sort and don’t mind adding a little elbow grease to the pot.
2. Compare figure to resources
Now that you have a very general guesstimate of what a typical remodel of your space might run, compare this number to the figure you can realistically afford. If you’re planning on paying cash for the entire project this is very easy to do, but if you’ll be financing part or all of the project you will want to speak with a lender about your options.
Look into a home equity loan, HELOC or maybe even a full refinance and compare your new payments to what you currently pay to determine how much money you can safely borrow.
3. Map out plans
Once you get to where your ballpark estimate more or less matches what you can afford, it’s time to design your space and determine exactly what you want.
At this point, the more precise your selections are, the better. Choose the exact faucets and fixtures you’d like to install as well as flooring materials, lighting, countertops, etc. The more detailed your list, the more accurately bids will reflect your true final price.
4. Collect several bids
Armed with all the details for the kitchen or bath of your dreams, solicit at least 3 different bids from contractors in your area.
As a rule of thumb, add 20% to every bid for a cost-overrun contingency.
Often complications arise where extra costs are added in that a contractor will not be obliged to cover, even if you’ve signed a contract. Examples include pre-existing plumbing/electrical issues in your home, unseen water damage, rises in the price of materials or changes to your plans.
5. Pivot and adjust
If your lowest bid + 20% fits within your “affordability” range, you’re ready to move full steam ahead. In fact, sometimes bids come in much lower than what you’d expect so you’re able to add in a few extras that you thought you couldn’t afford.
But if your best bid still leaves you short on cash, don’t panic. This is where you make adjustments to lower total costs.
Set priorities in terms of the most important features you’d like to see in your new space and start by cutting costs with items at the bottom of the list. From selecting cheaper materials to removing features entirely, work backwards until you’ve got a new plan that fits within your spending limit.
Always re-bid on your new design. Never assume that the price cuts you calculated will be adjusted in the same fashion by your contractor.
Remember, in extreme cases where no more corners can be cut, consider doing part of the work yourself to further lower costs. You might not know how to solder fittings, but anyone can handle a paint brush!