Are you having trouble developing a home renovation budget? Don’t know where to start? Just remember, the budget is your budget. Because it is so personal, but also a business-like roadmap for your new home. What’s the size of my budget? What should it be? Where to spend it? Does it make sense?
In our opinion, it comes down to two points: What’s important to you and what is the purpose of spending the money.
Let’s start with the second question first, as it will create a baseline for the first question. It’s important to first define why you are creating this home renovation budget in the first place. Is this your ‘Forever Home’ that you are going to be building your family in? Or, is it a stepping stone in your final real estate goal? Do you want to spruce it up because it’s looking tired? Or, do you want to give it a complete facelift? Give some good thought to those questions, as it creates the framework to move forward.
We’ll focus on the ‘Forever Home’, but if you want to discuss either of the latter options, shoot me a note and I’ll offer some free advice.
Now, you will decide how much you could possibly want/afford to spend. Once you have that number, reduce it by 20-25%. This is your contingency fund for when you open walls and things are not the way you and your contractor thought they were. Or, you decide you’d like something nicer mid-project! This happens more than you might think, even with a very well thought out home renovation plan. Be patient, visually walk yourself through every room, allow the number amount happen organically. Conceptualize your renovation and decide what space is most important to you. This is where it ties into question one (see what we did there?).
Consider how you use your home, this is what shapes the framework you use to create your budget. If it’s your kitchen and you love to cook and use your space to entertain guests and family, you will push more resources towards this space. If there are renovations to your home that are less important, go ahead and reduce their budget accordingly. Now it’s time to call a professional contractor. If you don’t have one, find a minimum of three contractors to vet based on our previous post. Always acquire a quote for your home renovation based on your budget.
By doing this you will qualify your budget and determine if you’re able to move money into different areas of your renovation. This allows you to make the overall project more manageable rather than things getting out of control. Still coming up short? Don’t worry – it’s common. Perhaps you just need to adjust the scope or material quality? Don’t be afraid to push the project for a year until you can afford to properly commit to it and the financial commitment. Remember, this is your dream home, don’t rush it.
Be honest with your home renovation budget, I can’t stress this enough, don’t over commit and don’t lie to your trusted contractor about what you are willing to spend. They will make budget-conscious decisions and offer solutions on what you tell him you are willing to spend. There’s nothing more frustrating than finding out that had you been more open about your budget, you could have had a better renovation. You could have had heated floors or pocket doors where you have swinging doors now, as well as changes to how you view the space and how you use it. Be firm, confident and honest with your budget amount. However, in the end, you’ll likely end up spending more money, having to redo certain areas or have to live without something you could have otherwise had.
You now have your home renovation budget. You have a plan as to what you are doing and how it’s getting done. And, you have a contractor that you trust and believe will do the best job for you. All that’s left is firming up this plan with your contractor!
Next, you need to get the blueprints done so you and your contractor have a firm, clear understanding of what your project will look like when finished. We’ll touch on this in another post, but we always recommend using a lot of visuals as you go through this process. Ensure you include your contractor, so you also get their insight into your renovation plans. Make sure you, your contractor, and your architect/designer work as a team to build your plans. Not everyone will agree, but we feel those involved in executing your project should be involved in the design. As a result, everyone will have a better understanding of your intent and purpose. We feel this is critical for clear communication and a clear insight of your expectations of your home renovation.
Finally, you are on to the next step of your project with your building team in place. Much more to discuss! Remember, our team is here to answer any questions you may have on how to prepare a thorough home renovation budget. Good luck and talk soon!