How to Budget for Renovations: Getting the Most Out of Your Money
Aesthetics have become an indispensable part of our lives. You wish your homes to look elegant and beautiful. However, beauty carries a price. Renovating a home or an office can be a bridge too far for many people. Perhaps the only reason behind the inability to undertake renovations is the lack of a requisite budget.
Budgeting is indeed an extremely tedious task. Budgeting can put a strain on your mind and resources. People have to take care of every minute detail. They have to cater to the estimation, arrange funds, and stick to the estimated budget.
This write-up intends to relieve your burden considerably. Whether it is your bathroom, basement, or backyard, you will feel at home renovating your house’s attachments. The key to creating a feasible budget for the renovations is to avoid the curse of overspending.
The Cost Involved in Renovating a House
According to the latest estimates, one might have to spend $10-60 per square foot during a renovation. The average remodelling cost is $47,830, with lower and upper ranges being $17,913 and $77,955, respectively.
Restructuring the kitchen, bathroom, and basement alone may cost you $30,000-81,000. Any luxurious addition to your home can increase the cost manifold. Hence, the costs involved imply that you must move carefully.
Steps Involved in Making a Budget for Renovation
- Prioritize Your Renovations
The smartest way to proceed is to write down the projects you desire to undertake. Determine the cost involved in each project by taking bids. Formulate a priority list writing mentioning the projects you wish to complete first.
Don’t proceed arbitrarily. First, you must address the direst needs. The repair work always takes the lead. The issues like insufficient ventilation, obsolete electric wiring, damaged windows and doors, cracked walls or ceiling, etc., must be dealt with before an effort to enhance the house’s aesthetics.
After finishing the repair work, you may proceed to add value to your home. If you intend to increase the return on your investment, you may renovate the kitchen, bathroom, basement, or backyard. Modifying the exterior and interior of your house according to the market demand will pay dividends.
Similarly, a fountain or a swimming pool will enhance the appeal to a different level. You may also focus on the decor and decluttering(making more visible) your house. You may add furniture to add value. Coingate may come in handy for buying refined home products online.
Hence, the greater the value-added, the greater the value reaped.
- Thumb Rules for Determining Your Expenditure
The expert opinion states that you should allocate 5-15% of your house’s value for the kitchen renovation. Similarly, 3-7% of the house’s value should go to bathroom remodelling. These thumb rules will prevent you from overspending on your house. The key is to bring improvements keeping in view the locality of your house.
- Calculating the Budget for Renovation
The calculation is the key question. There are two ways to calculate the renovation budget:
- Square foot method: This method is fairly simple. You can calculate it by taking into account the quantity of building material that will be used for the renovation. However, this method may overlook the additional cost.
- Full cost method: Only a professional cost estimator will be able to perform this method of calculation. Hiring such a service will increase the cost, but it will give you a nearly exact estimate.
- Evaluate Your Financing Model
A key decision is awaiting you: how will the renovation be financed? Consider your options and come up with a realistic solution. Whether you are spending your savings or applying for a loan, keep a cushion of 10-20% of your estimate. This will cater to the emergencies which may arise. Such contingencies cannot be predicted in advance, so you must be ready for them.
- Ask for Multiple Bids
Now you need to find a contractor to renovate for you. You are quite aware of the expenses and your financial model at this stage. You can invite people to present their rates and choose what is suitable for you.
Try to get at least five bids for the contract. Don’t go for the contractor whose bid is far below the estimated price; you don’t wish to lose the quality. Hire a contractor whose bid is closer to the estimates you have prepared.
- Tips to Save Money
You may save money by being your own project manager rather than hiring one. Additionally, you may use refurbished products during renovation instead of buying brand new ones. Similarly, you may reduce the painting cost by painting the rooms yourself.
Budgeting for the renovations can be pretty burdensome. Vigilance is the key to your planning for the renovations. Follow the tips mentioned above and add great value to your home.