Home improvement projects can add value to a property and enhance the homeowner’s quality of life. However, it’s important to create a realistic budget before starting any work. Otherwise, the project can quickly escalate beyond a homeowner’s financial means, resulting in stress and disappointment. Here’s a look at some tips for budgeting for your home renovation:
Start by determining which projects will have the most impact and focusing on those first. For example, kitchen and bathroom upgrades can significantly increase a home’s value and desirability, but they’re also the most expensive room renovations.
Next, research the costs of each project to get an estimate for materials. This will require some time and patience, but it’s worth it to get an accurate cost forecast that takes into account any unforeseen expenses. It’s also helpful to compare rates between contractors and other sources online. This will help avoid being overcharged or paying less than you should for services.
Another expense to consider is the cost of labor. Typically, labor makes up 20 to 35 percent of total renovation costs. If you’re hiring a contractor, make sure to find out what his or her hourly rate is and be prepared for a potential additional charge for ordering materials.
Finally, it’s a good idea to save up an extra 30 percent of your projected renovation costs for unexpected expenses. This will provide you with a cushion in case a problem arises that you can’t foresee, such as plumbing or electrical issues or asbestos that must be removed before work can begin.