Remodeling your home might be one of the most complicated projects you do as a homeowner, and staying within your home renovation budget could be its biggest challenge. There are lots of temptations along the way that could throw you off the path to staying true to your financial goals while upgrading your home. By working with your contractor and preparing for contingencies, you’ll be able to manage the budget intelligently.
Step 1: Articulate Your Goals
Write down on paper what you want to accomplish with the remodeling project and what your priorities are. Do you want to gain as much square footage as possible, or is the primary goal to improve the quality of the fixtures and finishes?
Step 2: Computerize the Budget
It’s possible using today’s technology for you and your contractor to share the budget documents in real time. You’ll be able to tell where your home renovation budget stands at all times. Alair Homes offers this capability with our proprietary online system, a system that also grants you complete budget control.
Step 3: Making Trade-Offs
Situations are going to come up where you want to change your mind about the renovation, or a situation comes up with the renovation that can’t be ignored. You’ll have to decide whether you want to spend the money originally intended for the renovation on the necessities and postpone the upgrades, or is it worth it to you to move forward with everything as planned?
If you plan to sell soon and the market will bear the extra cost, it may be worth it to do both. Bad wiring, compromised ductwork, or foundation problems might prompt having to rethink your priorities.
One way you can avoid surprises during the remodeling process is to have a home inspection before the project starts. A licensed inspector will go through your home looking for problems that need attention like foundation cracks, termite or rodent damage, wiring and plumbing problems, or HVAC issues.
Step 4: Assess Your Options
Once you understand the ramifications of the situation forcing you to rethink your home renovation budget, you can look for ways to deal with the challenge the unavoidable caused.
Step 5: Identify Your Resources
Have a list of financial resources to use for serious problems that might occur during the home remodeling project. Even though staying on budget is important, strict adherence may not make financial sense if it will cost you more in the long run to ignore it.
Financial resources might include tapping into savings accounts, using a home equity line of credit, or borrowing from a 401k account. Obviously, you’ll have to pay back the equity loan as well as the 401k loan through payroll deductions.
Even though you’ll have to exceed your budget, fixing major problems should be a priority. The home inspection will uncover most problems, but there is always a chance something unanticipated might happen for which you need extra resources.
Dealing with the home renovation budget is a reality of building and remodeling. Keeping it foremost in your mind is important to the process, but knowing when it’s time to be flexible is also important. This is why open lines of communication are so important. Alair Homes offers you a home renovation project built on transparency and communication. It is always our goal to help you understand options, avoid concerns and stay involved in the process. Contact us to discuss your project.