5 Unexpected Things Most People Miss When Budgeting for a Home Renovation
There is little in life that is more scary and exciting than a home renovation. According to Houzz almost half of homeowners go over budget when doing a home remodel and only 1 in 5 come in under budget. YIKES! Fear not, in this article we are going to share the 5 reasons most budgets are blown and how to account for the costs in your initial pricing estimates so that you can be the exception to blowing a home renovation budget and be an inspiration to homeowners far and wide. First of all let’s cover a few FAQ.
How Much does a Home Remodel cost?
The average cost to remodel a house is $19,800 to $73,200, depending on the extent, home's size, and quality of materials and appliances. Whole house renovations will cost $15 to $60 per square foot on average, while only remodeling a kitchen or bathroom runs $100 to $250 per square foot. Typically, you can expect to spend at least $100 to $200 per square foot on any home renovation.
Home renovations made to an older home tend to cost more than a newer one, especially if the wiring, plumbing and other features aren’t up to code.
When you’re deciding on your home renovation budget, it can be easier, and more affordable, to prioritize projects by room and build a budget around the cost of each individual project.
Estimated Home Renovation Cost by Room:
Source: https://homeguide.com
How much should I spend on a Home Renovation?
When you start your remodeling budget, consider the reason you are making updates. If you are making updates with the thought of ROI (return of investment) in a future sale you’ll want to consider the value of your home as a whole. You don’t want to spend more than 10 to 15 percent of your home’s value on a single room. If you spend more, the value of the home renovation will not proportionally add to the value of your home. For example, if your home is worth $100,000, the maximum you should spend on a kitchen or bathroom renovation is $15,000. If your house is worth more, the spend on a renovation could be higher.
This may not be the driving force behind your home renovation project. Many clients want to make updates because they envision living in the space for a long time to come and want to make changes to accommodate their personal taste and lifestyle. In this case, the budget will depend on the specific desired updates as well as the individual finances available.
5 Things People Don’t Expect When Budgeting a Home Renovation:
Taxes and Shipping
This one seems easy enough but you’d be surprised how many clients are shocked by estimates simply because they didn’t account for taxes and shipping. If you don’t already have a simple spreadsheet with your product costs by line item, start there. Add a column for the estimated taxes which should be somewhat easy to account for by adding your states tax rate to the item costs but shipping/delivery costs can vary by product. To get precise numbers leave a column in the spreadsheet for additional delivery costs which most suppliers should be able to tell you an estimate of in advance if you reach out to them. Heavy or fragile deliveries like cabinets, appliances, or tile can add $100-$500 in shipping/delivery so it’s important to account for these costs in the early budget as much as possible.
2. The Real Price of DIY
Thanks in part to HGTV shows and the like, home updates *appear* to be something anyone with a few tools and access to Youtube tutorials can tackle. So many folks think they will save big time by not hiring out and tackling projects themselves. THINK AGAIN!!!
Numerous clients come to us after attempting updates themselves and let me tell you it is FAR MORE costly to bring in professionals in the middle of a botched project instead of at the beginning. According to Philadelphia-based interior architect Glenna Stone, a DIY project without the proper expertise could cost you anywhere from 10%-40% more than hiring a professional in the first place.
This isn’t to say there aren’t home updates you could successfully DIY but be very realistic in your own skill set and expertise before jumping into a DIY home renovation project. Even for updates you feel confident in doing yourself, bringing in professionals early in the process can also save you unexpected surprises. At Sukkha Interior Design we offer a Design Consultation which is an affordable option to get some professional advice before you start a DIY. Professional eyes may see potential considerations or issues you hadn’t thought of. For example, we had a client who decided to remove their existing lower cabinets to replace with a built-in shelving unit. The husband was pretty handy and his skillset could certainly handle popping out the cheaply made cabinets and building the simple shelving structure in its place. What they didn’t realize that underneath the cabinets was asbestos tile. They had planned on replacing the flooring once the new fixture was in place; they had certainly not budgeted for a new subfloor or the removal of a toxic substance. While a professional consultation couldn’t have predicted exactly what they would find, it would’ve made them aware of these types of possibilities so they could’ve better prepared their budget (and headspace!) for the reality of this type of project.
3. Time is Money
We have all heard this saying over and over again but never does it hold more true then when it comes to home updates. A common question we get a lot is why the big price difference between our Design Plan Service (a thorough product specific how-to design plan customized to each space) vs our Full Service Design Service (we take care of the entire project start to finish, including design , logistics, and installation.) The answer is the price of managing the logistics.
Often the time it takes to coordinate jobs and deliveries is overlooked and can be a substantial slap in the face to an otherwise accurate budget. The timeline of a home renovation involves careful planning, organizing, and maintaining. Let’s look at a bathroom renovation for example. Let’s say the toilet and sink fixtures are delayed by a day or two - no biggie right? Well, if the plumber is scheduled for the day after the delivery is supposed to arrive and isn’t contacted they are going to charge for the site visit even if the fixtures aren’t there to install. And then they’ll charge again to come out to install the fixtures when they do arrive. Having a professional managing the project will ensure that delays or changes are shared with anyone it may affect and that the plumber is rescheduled accordingly, avoiding unnecessary costs. Managing a home remodel or home renovation involves A LOT of time and organization. Make sure you are capable of handling the project coordination or that you hire someone who is. While hiring a contractor or designer is an additional expense it will ensure your project stays on track which will save big time dollars in the long run.
4. The Small Stuff
Many times initial budgets focus on the large ticket items: appliances, flooring, paint, light fixtures, tile but forgoes the smaller items that can add up. Don’t forget to account for things like finishes, hardware, grout, caulking, painting supplies + materials, etc when you are compiling your budget. It may seem like small potatoes but these will add up fast and can be a common budget killer in the end.
5. Changing your Mind
Nothing is more costly than changing a design plan midway through the project. Of course there are plenty of cases where this can’t be avoided; for example a manufacturer ends up not having the countertop originally specified and you have to choose an alternative. However we have worked with many clients who make change after change after the design plan is approved and these types of changes are the easiest way to destroy a budget.
Not only are there costs associated with changes after orders are placed, almost always they will add delays to the project. The time it will take to reschedule around changes on top of the fees for returns or exchanges (assuming the vendor will allow it at all) becomes almost astronomical before you know it. I have seen clients nearly double the initial budget by making cosmetic changes after the project is well underway. Of course it is important that you are happy with the selections and outcome but spending more time finalizing the design plan BEFORE the project starts will save you hundreds if not thousands of dollars that were not budgeted for originally (not to mention tons of additional stress and headaches).
Long story short : Home renovations/ home remodels are no joke. Starting with a thorough design plan that includes a detailed budget will set you up for success budgeting your home renovation. Avoiding professionals to cut costs is rarely worth it in the end. Many professionals offer consultations- these typically cost a few hundred dollars and can save you thousands of dollars in unexpected surprises down the road. For a list of ways to keep your project under budget check out our post with 8 Ways to Keep your Home Renovation Under Budget.
Considering home updates and not sure where to start? Schedule a free intro call with us today!
