How to Make a Realistic Home Renovation Budget The Easy Way
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5 useful tips on how to make and stick to a home renovation budget
A home renovation will give you the living space of your dreams. So, why are the very sounds of the words, “home renovation”, enough to make many people feel worried and overwhelmed at the thought of how much money they will end up shelling out before it’s done. You have lots of plans to turn your living space into a dream spot through home renovations.
Before you get started, sit down and crunch some numbers. Its important to know exactly how much money you have to spend and how to budget for home renovation. Once you have a budget set, stick to it. These helpful tips on how to make a realistic budget for home renovation will help walk you through a process you can easily follow and afford. Let’s get started with a workable and realistic plan.
Budgeting for home renovation projects is a challenge to do and to stick to, why not let those who have mastered budgets help you. The team at Diligent Developments have experience with helping clients set and stay within their home renovation budgets. Want to get tips for making and sticking to a budget for your home renovation project? Keep reading to find out more.
How much will it cost?
The first step to making a realistic budget you can stick to is to know the exact amounts of money you are dealing with. Before signing up with the first building contractor who knocks on your door, do a little research into what to expect. How much will it cost to complete the home renovations you have in mind? Don’t forget additional costs for things such as possible planning permission costs, building regulations, which start at about £80 on up to much higher, insurance fees, or possibly a warranty to cover the work, usually between £1000-£5000 to obtain a 10-year warranty.
The average cost to renovate a home is going to depend on how much you want done, how big the rooms are that need contract work, and whether or not major plumbing, electrical, gas, or load-bearing walls are involved. For larger homes, this price tag will naturally go up. Renovations made to older homes are going to cost even more, as much as between 30 to 50 percent more, since a lot of the wiring, plumbing, chimney stacks, or other extensive work will probably need to be done. Typically, expect to spend at least £1,000 per square meter on a home renovation project.
Begin by prioritizing
Start by going room to room and making a list of projects you want done. Then, start to prioritize which projects absolutely have to be done immediately and which ones can wait. A typical 4 meter by 5 meter extension is going to cost about £30,000 to upwards of £44,000 depending on the quality of workmanship. An average kitchen is going to cost approximately £4,000-£8,000 to renovate depending on the extent of what you want done. The kitchen alone could go up to as much as £15,000. Plumbing work is often priced at about £60 per hour, tiling, installations, plastering, or painting can run between £15-£25 each per hour.
Gather information to get an approximate idea of what your renovation budget should be, and then consider the value of your overall home. Never spend more than 10 to 15 percent of your entire home’s value on one single room renovation. For example, if your home is worth £150,000, the maximum you should consider spending on a room renovation is £15,000 to £22,500. Otherwise, do not expect to regain the expense when you go to sell your home.
Don’t forget to budget insurance
There are a few extras that many don’t think about. One of these essential budget items is insurance. Don’t forget to budget in the cost of insurance. You may think it’s a gamble and not worth the effort, but if something goes wrong you will wish you had thought to include it in the overall budget price.
Renovation insurance is based on the estimated value of your home after the renovations are complete and a few other factors and typically ranges between £600–£1,200. Regular building insurance won’t always cover large renovations. If you are making significant structural changes or are leaving your home vacant for a lengthy amount of time during renovation, you will need specialist renovation insurance. Also consider taking out an insurance policy to cover items that could become damaged during the renovation work.
Expect the unexpected
Once you have determined an approximate amount of how much you will be able to spend on a project, go one extra step to set aside a little bit extra funds. It’s always a good idea to have between 10 to 20 percent of our available funds on hand just in case unexpected expenses arise, and they will. Always expect the unexpected, and have a back up plan. Know that it is quite common for unexpected expenses to crop up when renovating a home, especially if it is an older home. When you set aside this extra cushion from the start, you will have the peace of mind that it is there to draw from should it become necessary so you don’t have to leave a half finished project undone.
Prioritise and make a list
The best way to stick to your budget is to know exactly what the money is going toward and how much you have in the first place. It’s important to prioritize all of your renovation projects. Start by making a list of everything you want done, room by room. Then, separate the list into which items are absolute necessities and which ones are more of a luxury or something you merely want. Ask yourself what do you want the renovation to do, what details are going to be required, what do you want to splurge on, which areas are deal breakers must haves, and where are you willing to compromise.
Create a detailed plan
Once you have your list of priorities, it’s time to create a detailed renovation plan complete with amounts and estimates for cost as well as some seemingly smaller details that could add up to put you over budget. Use this list when you interview each contractor, and begin to create a spreadsheet that lays out your home renovation priorities and the estimated costs.
Know precise prices to structure your budget for home renovation
Include price of labour and materials. Labour costs is going to most likely account for between 20 to 35 percent of the overall budget. It’s one thing to see a picture of renovation features, but it’s another to actually choose the specific items you want. Select the items you want by choosing the actual fixture, knobs, faucets, paint, tile, flooring, or finishes to get a more precise cost estimate.
Consider necessary details
Always remember to account for taxes or shipping and delivery fees in your estimate for materials. Also, consider environmental aspects. If you are renovating a kitchen or bathroom where there may be appliances or sinks and such to dispose of, ask about disposal costs. Also, don’t forget about things like paint brushes, tape, drop cloths, tools, or even sand paper. Include everything on your list no matter how inexpensive or small it may seem. It all adds up.
Think of everything
Finally, think about how it will be to, for instance, live for a month without a working kitchen or bathroom. Take into account how much it will cost for you to live in a hotel or elsewhere if it becomes necessary to do so during the renovation. Also consider children or pets that may need to be relocated during the work on the project. Now is the time to make sure every detail is covered.
Make sure you have the needed funds
Get financing pre-approved
Once you have your heart set on a home renovation plan, the last thing you will want to happen is to discover you simply don’t have the funds to pay for it. Save yourself the heartache and embarrassment by first making sure you have the needed money. Before finalizing any budget, it’s a good idea to make sure the money is actually there and available for you to spend. If you don’t already have it saved up in your bank account, you will need to seek financing through a loan or credit cards. Do this before finding a contractor and signing work orders that commit you to payments. Obtain pre-approval through a bank first if you are going to need to take out a home improvement loan.
Know when to DIY and when to trust an expert
Do it yourself or hire out
Know when and what you can save money on by doing it yourself and when it’s beyond your scope and time to call in an expert contractor. Sometimes you can save money by removing cabinets or pulling up tile, buying your own fixtures or finishes, or painting yourself.
Don’t just hire the first contractor who comes knocking at your door claiming they can do the work after you give them a large deposit. Seek out several contractors to request bids from first, and then look them all over to compare before deciding which one fits your budget and your other needs.
Ask for a bid for your project, and get a bid from at least three different companies for comparison. If one is noticeably lower than the others, don’t assume you are getting a bargain. Chances are they have not included everything in the estimate and there will be not-so-pleasant price shocking surprises after the work begins. Before hiring a contractor, check their references and be upfront about your budget for renovations. Use the competitor bids to negotiate a fair price that fits within our budget. Make sure the contractor is on the same page as you so you know they will understand and meet your needs completely.