Cost Of Home Remodeling
You should know the TOTAL cost of home remodeling projects BEFORE they begin. Make sure your resources can handle ALL of these remodeling costs. The last thing you want is for the work to stop before it's finished because you ran out of money. It's not just the labor and material provided by your contractor that comprise the cost of home remodeling. Architectural fees, permitting fees, interest on a construction loan, any direct purchases you make, and the value of your own time, should all be components of home improvement costs, when they apply. Here are a few common mistakes you should avoid. 1) DOLLARS PER SQUARE FOOT - On the internet you can find tables and chart illustrating typical costs based on dollars per square foot. It's commonly used and quick. And they are totally unreliable and misleading. These charts don't know the level of your proposed interior finishes. Do the house sizes include finished square footage or total square footage? Which area of the house was renovated - basement, garage, attic, kitchen, bath, den? A new kitchen costs a lot more than a basement. An expansion costs a lot more than finishing an attic. See what I mean? These figures are meaningless. 2) OVER IMPROVING - Some people believe that the more square footage a house has, the more it's worth. That can often be true, but if you expand a house substantially beyond the size of neighboring homes, it could look massive and overbearing. This could significantly diminish the home's value, while significantly increasing the cost of home remodeling. You should keep yourself informed about neighboring home values. Even if your house is larger, it will probably only sell for 10% to 15% more than the neighbors. Keep that in mind when you determine the scope of your project.
3) DOLLAR FOR DOLLAR RETURNS - Many homeowners think if they spend $30,000 for a new kitchen, they can then add $30,000 on to the price of the house when they are ready to sell. This is a common mistake. Kitchens and baths yield the best returns at about 80%, if sold within 2 years of the renovation. Of course, the longer you own the house, the greater the overall value will be. In 10 years, that $30,000 kitchen will be worth $50,000. 4) RENOVATING TO SELL - Doing a major remodeling job just to get a house ready to sell is a big waste of money. Since (as already mentioned) the cost of home remodeling does not yield full returns within 2 years, do only the quick and cheap things that make the house look clean and neat. Consider minor frontyard projects to enhance curb appeal. Instead of a full kitchen renovation, think about just replacing countertops and refacing the cabinets. You get the idea. Then you'll have more money to spend remodeling your next house. 5) COST OF HOME REMODELING PREVENTS NEEDED MAINTENANCE - You blew it all on the new patio, and now you don't have what you need to repair an appliance, or maintain a furnace. If a prospective buyer sees that something is not in good working order, they will lessen their offer by what they think a replacement might cost. Repair vs. Replace - which would you rather pay for?
The right way to determine costs Get estimates from the architect and the contractor. Review the respective scopes of work. Get prices for any items they are not including (like decorating items & furnishings). Get a subtotal and add 10% for contingencies (like buying stuff you don't yet know exists). Add another 10% for changing scope due to you changing your mind and/or unforeseen field conditions. Add another 10% to approximate the value of your time. Add in any financing costs (projected over the term of the project). Total it all up. That's what your cost of home remodeling will be.
Make sure you get what you want You've determined what that is by keeping pictures of what you want the finished product to look like. Then you reviewed the pictures and discussed your wish list with the architect before he started his drawings. If you can't interpret the architect's drawings (or any other construction documents) ask him or her to explain them to you. Review those drawings with your architect, making sure that every item on your wish list is included. I once neglected to have this meeting and it caused a problem because one of my wish list items was missing - which always translates into "more money" when something needs to be reworked, or replaced. Make sure the contractors are all bidding the same work Once those drawings are finalized, get several copies made, keep one for yourself, and make sure the construction bidders all bid off the same documents. If any of them want to suggest alternatives, tell them to bid the item as an alternative. Now you've leveled the playing field and you can evaluate the bids properly. Determine who the contractor will be. Then you should meet with him to do what's called "value engineering." This essentially is a brainstorming session to discuss any suggestions which will lower the cost without compromising the integrity of the project.
Possible sources for financial help There are 3 ways you could potentially get some money to help with the cost of home remodeling: grants, rebates, and tax credits. There are also a few government sponsored, low-interest loans you might be eligible to get. Most of the grants and government loans are offered to people going through hardships. If you've been victimized by a natural disaster, or if your household income is less than $50,000 a year, you might be eligible. If these circumstances don't apply to you, don't waste your time. If you think you might be a candidate, click here to get more information.
Tax credits and rebates, on the other hand, apply to just about anyone whose remodeling costs included upgrading their heating, air conditioning, or appliances, to units with high energy efficiency. Appliance manufacturers, utility companies, and some equipment distributors participate in these programs. The federal government still has a few tax credits available (up to $2,000), and many states are offering tax credits as well. So if you get a postcard in the mail from your utility company, and you were considering upgrading your heating or air conditioning, call them up. They will send someone to survey your situation and tell you what they can do for you. You probably won't find enough help to cover the total cost of home remodeling, but every little bit helps. And remember, you'll be saving on your future energy bills as well. If you want more information about home heating costs, click here to see it.
For something about kitchen remodeling costs, click here to see it. And to learn about estimating remodeling costs, click here.
If you have any questions about the cost of home remodeling, contact me by clicking here.
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