In today’s housing market, buyers face many challenges. It’s not easy to find a home you can afford; even if you do, renovation budgeting may not have crossed your mind. Improving your existing home may be a better option, or finding a cheaper home that needs some work, but renovating is still a major project that can cost tens of thousands of dollars.
Renovation seems like a splurge, but it’s an investment.
Imagine this. You live in your house for years—possibly even decades. Your family has created memories there and established a life in your community. Renovating your home will salvage the memories and the life you’ve built in your neighbourhood. It will also increase your house’s financial worth if you do it correctly.
Renovating is worth considering what you want to change and how much you’re willing to spend.
It can feel like there are a million things to consider when it comes to home renovation budgeting, but it doesn’t have to be scary or stressful. There are ways to reduce the expense of renovating your home without compromising quality or style.
7 Easy Steps for Home Renovation Budgeting
Consider these easy steps when creating a home renovation budget that will help get your project off on the right foot.
Assess the state of your home.
Before you start estimating costs for renovations, understand the condition of your home. You may even have to hire a professional inspector or electrician to assess your home’s lurking defects and electrical issues. Although it may require you to spend some money, it will save you more in the future for further repair expenses or even hospitalisation when your house crumbles.
Spending a lot more money on unexpected repairs is the last thing you want to happen.
Estimate the costs for repairs.
If you hire a contractor to do some repairs, they’ll give you a quote based on the materials and labour they’ll need to complete the job. Whether you’re planning to repair a few fixtures, the roof, or the foundation of your house, you can talk to contractors about how much it would cost to fix them.
Decide what you want from your renovation.
You need to decide the results you want from your renovation. Ask yourself questions to help narrow down what you want from your renovation.
- Where do you spend most of your time?
- Do you have spare rooms?
- What rooms are in the worst condition?
- What rooms need updating?
Set an amount to spend on renovations only.
Once you’ve figured out what you want from your renovation, decide how much you want to spend on renovations. There are several ways you can do this, but the most common way is to set a budget based on the cost per square foot of your renovations. Square-foot costs are a good way of budgeting renovations because they consider the size of the room you’re renovating.
It’s because the cost of a renovation is directly proportional to the size of the room.
But keep in mind that square-foot costs are just an estimate. The actual renovation cost may vary depending on other factors like the cost of materials and the contractor you hire.
Don’t forget about future costs.
General maintenance costs are also a consideration. Remember that there are ongoing maintenance costs associated with most renovations. In addition to the upfront costs, there’ll be future repairs and regular maintenance. For example, if you’re installing hardwood floors, you’ll need to refinish them every two years to ensure they’ll look great and last a long time.
On the other hand, transforming your home to make it sustainable and energy-efficient may require a larger renovation budget upfront but will save you more money in the long run.
Add in a buffer for unforeseen costs.
If you’re estimating square foot costs, include a buffer for materials. Roofing materials, for example, can go up in price depending on the season and materials needed. If hiring a contractor, include a 15% contingency in your budget to account for any unexpected costs. It is standard practice in most industries, and contractors expect it.
If you don’t have a contingency fund, you’ll worry about where you’ll get extra money when unforeseen circumstances happen.
Finally, don’t forget to account for permit fees.
Create a list of tasks by priority.
Once you have a rough idea of how much you’ll spend on renovations, it’s time to figure out what tasks to prioritise. Before you start scheduling projects and signing contracts, it’s a good idea to list what to do by priority. This way, you’ll know which parts of your home need to be renovated first.
For example, if your kitchen is falling apart, it does not make sense to renovate your bedroom first, although it’s cheaper. A list of renovation priorities will help you to avoid making costly mistakes.
Get multiple quotes
Request a quote from multiple contractors to ensure you get a fair price. Keep in mind that contractors usually charge more during the busy season, so prices might vary depending on when you do your research and request quotes.
You may also consider hiring a contractor who charges by the hour. Although they will charge you more upfront, they may cost you less in the long run.
Also read: A Guide on the Cost of a Full-House Renovation in Australia
Wrapping up
Home renovations can be a major expense but also an investment. You live in your house for years—possibly even decades. It’s worth thinking about what you want to change and how much you want to spend. Before you do your home renovation budgeting, understand your property’s condition.
You should also estimate the cost of repairs and consider the future costs this renovation can bring you. It’s also good to be prepared for unforeseen expenses and compare contractors’ quotes. Keep these tips in mind when creating your home renovation budget, and you’ll be well on your way to a successful renovation!
Request a quote from MKJ Projects, and let’s talk about what you want to renovate in your home.
