The decision of renovating to sell or renovating to keep will dictate what types of improvements suit your needs and budget best. Consider a strategic approach.
By: Angie Picardo
Before pulling up a budget worksheet and calculator, take some time to reflect and walk through your goals for desired renovation.
What do you want out of your renovation?
The reasons for considering a renovation are multifold. A driving force in the growth of renovations recently has come out of the baby boomer generation. More and more baby boomers are seeking to “age into” their homes instead of downsizing. The decision of renovating to sell or renovating to keep will dictate what types of improvements suit your needs and budget best. If you renovate to sell, opt for projects that are as low cost as possible. If you are renovating to keep, there is much more leeway in balancing comfort and aesthetic preferences.
What do you really need?
Start making lists of urgent projects that need to be completed during a renovation (structural issues, water damage, code violations etc.). Next, make a list of needs. Lastly, at the bottom of the priority list is the “would be nice to haves”. A list of your wants and wishes is great to have on hand in the case that money is freed up in the budget for an extra project along the way. When making this list, consider the fact that you do not want to overdo the remodel. Location is a huge factor in the listing price so making a home in a neighborhood around $400,000 houses worth $800,000 may not be the best investment.
Consult some professionals
There are some terrific applications and websites available that allow you to plan a renovation budget and etch some rough plans. You can save a lot of money at this point if you do utilize these resources. However, if you’re an amateur renovator, your best bet may be to go directly to the source to collect advice and estimates.
The Pre-Construction Phase
With a guiding principle in mind and a list of urgent tasks, needs, and wants, you can finally approach an architect or a design team. Be careful during this step as setting up with a full architectural firm may blow your budget before you’ve even broken ground. Many architects can charge up to 8% of the construction budget. Instead of hiring an architect for the full deal, from 3D videos to multiple drafting stages, consider hiring them on a consultation basis and getting in a few short sessions instead. The drafts from those sessions can be taken to a drafting company that can use them to draw up construction plans that you can take to your contractor.
The Construction Phase
A general contractor can quite literally make or break your renovation. Shop around for contractors and make sure you get recent references. Once you’ve settled on a contractor, take a look at the budget and estimate they put together. Built into that estimate are several assumptions that you have to control in order to stay within your budget, like cost of tiles and appliances. You should keep these allowances in mind when shopping around. Remember that by shopping for products yourself, you may not get the best deals. Sometimes contractors get better trade deals and discounts. Don’t be shy in asking your contractors if they have extra material from previous jobs around, this may cut down costs on several parts of the remodel.
Here are three tips for getting the most out of your renovation while staying within budget.
When shopping, consider materials that increase heat retention and energy efficiency. Water saving toilets, smaller shower heads, and Energy Star appliances can all save utility costs in the long run. While federal subsidies for energy efficient home improvements have expired, you can still tap into some subsidies if you decide to add solar panels to your roof.
If you’re in your home for the long haul, consider making small simple changes to vastly improve your quality of life in the future. Widening doorways, flattening sunken living rooms, removing tubs and opting for showers, and upgrading lighting fixtures are all components of the new renovation trend of Universal Design. Making these small adjustments in advance of actually needing them during a full renovation saves the money and hassle of starting the process all over again later down the road.
Home is where the kitchen is
The kitchen is the biggest part of a home’s resale factor. Increasingly, the focus of the home has turned to the kitchen. The national average cost for a kitchen remodel is $27,000. It has become the new family room, and renovation costs alone show just how much time and money people are putting into their kitchens.
A budget-friendly renovation may be an oxymoron for some projects, but keeping the above tips in mind, a well planned and executed renovation is well within your fiscal reach.
About the Author:
Angie Picardo is a staff writer for NerdWallet. Her mission is to help consumers stay financially savvy, and save some money with Pottery Barn coupon codes.
Photo: Elvert Barnes