Creating and sticking to a budget is crucial to the success of any home improvement project. When undertaking remodeling projects, every homeowner is concerned with the value they bring and whether they offer a return on investment. Besides helping you recoup your investment, budgeting helps you avoid scope creep, which may strain your resources. Budgeting is, however, a tedious process that most homeowners would rather forego. At Aspen Home Improvements, we want you to get the most value out of your home improvement project. In this post, we explore the process of budgeting for your home improvement project.
Budgeting begins long before you start considering the material and labor costs of your remodeling project. You must first prioritize your improvement needs. Always go for projects that give your home the highest resale value. These projects include kitchen renovation, bathroom renovation, deck addition, basement, and roof replacement. Once you know what you want to improve, keep your money ready. Whether you plan to carry out the renovation using your own savings or financing, always have a cushion ready for any contingencies that may come up during the project. With the project identified and money at hand, you can follow the steps below to create a budget for your project.
Prioritize your Remodeling Needs
The best way to come up with a home improvement budget is by understanding why you want to renovate. You may need extra space because of a growing family, setting up a new home office, a better backyard, or an updated bathroom. You should prioritize remodeling ideas based on cost and how they improve your home’s resale value. Prioritizing will give you an idea of which projects are worth undertaking and which ones aren’t. According to moving.com, the most valuable remodeling projects include window replacements, kitchen upgrades, wood deck addition, bathroom updates, and garage door replacements.
Formulate a Home Improvement Plan with Cost Estimates
Once you have identified your most valuable home improvement needs, you should create a comprehensive plan that includes cost estimates. With a proper plan, you can determine your renovation budget, and you can easily eliminate projects that don’t add value to your home. Your plan could be a spreadsheet that breaks down your project into portions, along with the estimated costs. You could use resources like HomeAdvisor to get cost estimates for the various portions of your project. Your detailed plan also gives your chosen contractor an understanding of your specific goals and objectives.
Conduct Research on Costs within your Area
When you want to renovate your home, it is crucial to have an idea of what every item costs. As the homeowner, you should spend a significant amount of time researching material options, sources, and costs around your area. You can always research costs online, visit local suppliers, or go to showrooms and warehouses where the items are sold. You could also discuss your home improvement project with other homeowners in your area with the first-hand experience. These people will give you insights on how to successfully complete your project, cut costs, and obtain the best materials for your project.
Consider your Financing Options
You have to know where you’ll get the money to undertake your project. If you have enough cash saved up, then your project will run smoothly. If you are considering financing options, we suggest using your Home Equity Line of Credit or a Home Equity Loan, which are low-interest options. You can also obtain financing through SoFi loans, credit cards, or mortgages geared towards high-income individuals. You should set aside an emergency fund that is between 10% and 20% of your estimated project cost to deal with anything that comes up during the renovation.
Obtain Bids from Three Contractors
Now that you know your modeling needs and have your finances in order, it is important to find a contractor that can undertake the project within your budget’s limits. Research local contractors with a good reputation for service, and request them to create bids for your home improvement project. Contractors typically charge between 15% and 30% of your project’s total cost. Getting bids from different contractors helps you establish a baseline. A contractor who bids way below the average probably doesn’t understand the scope of your project.
Cost-Saving Tips for Home Improvement
While having a budget and sticking to it is important when renovating, it is never a bad idea to cut unnecessary costs. Here are a few tips that will help you minimize the costs of your home improvement project:
- Perform DIY work yourself- these tasks include demolitions, painting, shopping for materials, and pulling up tiles.
- Be your own project manager and hire subcontractors instead of using a general contractor.
- Use cheaper alternatives e.g. laminate countertops that cost 75% less than granite or marble.
- Consider using a professional design that eliminates wastage and scope creep.
- Shop for used or refurbished items whenever possible to minimize the cost of appliances and finishes.
- Work with reputable contractors
By taking the above steps and observing the cost-saving tips we’ve discussed, you should be able to successfully complete your home improvement project within your budget. Aspen Home Improvements’ experts understand the challenge of creating and following a budget. Talk to us for a consultation and quotation regarding your next project, and we will ensure you get the most out of your renovation.