Working on a home renovation project is certainly exciting, especially for first-timers. However, the cost of home renovation can quickly add up, making the entire project very expensive. For instance, you might be planning to upgrade your kitchen floor. However, the new floor might clash with wall paint and cabinets, forcing you to update them too. While at it, the idea of a kitchen island becomes unavoidable, and before you know it, your basic $2000 budget has surpassed $10,000.
Interestingly, every homeowner fears budgeting when working on home remodels. Therefore, you need a budget to control your home renovation budget. Otherwise, you will be bankrupt by the time you complete the project. This guide highlights important budgeting tips for home renovation.
How Much Does It Cost to Renovate a Home?
The total cost of a home renovation project varies depending on your renovation goals, parts of your home that need renovation, and where you live. The total cost also depends on the room size, materials, and type of renovation work needed. As such, some renovation projects may cost between $10 and $60 per square foot, while others cost more than $150.
According to Home Advisor, the average cost of various renovation projects should be as follows;
- Kitchen renovation – $13,000 to $37,000
- Bathroom renovation – $6000 to $15,000
- Basement – $11,000 to $29,000
Based on these projections, renovating your kitchen, basement, and bathroom can cost between $30,000 and $81,000. However, you should identify and prioritize rooms that require urgent renovation.
How Much Should You Spend on Renovation?
While there are no restrictions on how much you can spend on home renovation, you shouldn’t go crazy as some renovations won’t increase the value of your home. Therefore, you should consider your home’s value and monthly budget when allocating funds for renovation.
Therefore, if your house is valued at $250,000 and your monthly income is above $80,000, spending $60,000 to revamp some rooms, attic, and the roof makes sense. With this amount set, saving $2,500 monthly towards renovation will enable you to cover half of the costs within the first year.
According to financial experts, you should avoid financing options, such as home equity loans and home equity line of credit loans, when paying for home renovation. Getting into debt to finance your home renovation project isn’t a wise decision.
Budgeting for Your Home Renovation
Consider the following tips when budgeting for your home renovation;
- Prioritize Important Projects
You should prioritize rooms that require immediate improvements. Similarly, if you might have a strong desire to renovate a specific space, go for it. However, if there are no pressing rooms that require renovation, start with rooms that will add more value to your home. If you intend to sell your home, you should prioritize home renovations that increase your home value.
For instance, new roofing and wood flooring can improve your home value by 6 to 7%. On the other hand, if your renovation goals are to enjoy your space more, go for kitchen or bedroom closet renovation. While these renovations may not add a lot of value to your home, they will surely make your home enjoyable.
- Outline Renovation Cost Estimates
Having decided on rooms to renovate, the next step is breaking down the cost of renovating these rooms. This step is quite tiring, as it includes the cost of materials and labor. For better and realistic price estimates, you can consult a contractor. If your chosen room is the kitchen, your budget estimate may look as follows;
- New kitchen design – $900
- Cabinets and hardware – $6,670
- Appliances and ventilation – $3,200
- Kitchen countertops – $2,300
- Walls and ceiling – $1,100
- Flooring – $1,600
- Installation and labor costs – $3,900
- Plumbing costs – $900
- Miscellaneous – $200
Doing this will not only make it easy to calculate the total cost of your renovation but also enables you to redirect some costs. For instance, you can forgo new flooring and use the money to purchase fancy marble kitchen countertops.
- Sample Bids from Contractors
With budget estimates ready, you can take bids from various home renovation contractors. Search online and ask around for reputable contractors in your locality. Ask for their bids and projected timelines and compare. You should avoid the temptation of working with a contractor with the lowest quote. Evaluate the contractors thoroughly and find one with a reasonable bid within your budget range.
Budgeting for home renovation doesn’t have to be a daunting task. Regardless if you are renovating your home for sale, doing some upgrades after sustaining some damages, or simply want to improve its appearance, ensure that you work within your budget limits. You can opt for DIY renovation, use low-cost materials, or hire subcontractors to reduce the overall costs.