Home renovations are an exciting opportunity to refresh the look and functionality of your residence. Small home renovations such as repainting a room, updating a kitchen, or adding curb appeal, can make a big difference in how your home looks and feels, to you and/or to potential buyers.
Before you undertake any project, however, you should establish a budget. Doing so allows you to make choices that fit your budget and ensures that you can afford the necessary work and materials. Here is a look at some tips for setting a budget for small home renovations.
Consider the value of your home
While getting a space you love is always the primary goal of a home improvement project, you should also keep in mind the value that project will add to your property. If you spend too much on a renovation, you may not get enough back in improved real estate value to make your investment worthwhile.
A good rule of thumb is to spend no more than 15 percent of the value of your home on any single room of your house. For example, if your home is worth $150,000, you would not want to spend more than about $22,000 on a kitchen upgrade or bathroom remodel.
Smaller projects, such as painting a room or replacing appliances, are not likely to push you over this amount, but when you begin undertaking more extensive tasks, keeping an eye on your overall costs can help you achieve a renovation that adds to your home’s value.
Determine your available funds
Another important step in setting a budget for small home renovations is to determine how much you have available to spend on your project. That means 1) Determining how to finance your project and 2) How much is available to you through that payment method. Financing options you may choose, include:
- Paying cash
- Taking out a home equity line of credit.
- Paying with credit cards.
- Getting a personal loan.
- Accepting a financial gift from family or friends
Once you know how you want to pay for your project, you need to determine how much money you can access. For example, you may have a limit on how much credit you can borrow, or how much you can take out on a HELOC, or on how much you have saved to pay in cash. This amount will determine how much you can spend in total on your renovation project.
Set aside money for unexpected expenses
No matter how carefully you budget, and how good your contractor is, you are likely to encounter unexpected expenses during your project. For example, ripping out the bathtub may reveal water damage or mold. Replacing the roof may reveal rotted areas of plywood. Adding a dishwasher may require overcoming plumbing challenges.
In order to be financially prepared to weather these costs, you should consider setting aside 15 to 20 percent of your available funds for unplanned expenses. You can then budget your renovation on the rest. If you do encounter extra costs over the course of the project, you will have the money to pay for them, avoiding costly and stressful delays to your renovation.
Create a detailed renovation list
In order to ensure that your project fits within your budget, take the time to create a detailed list of what you want to accomplish. If you are doing a kitchen upgrade, do you want new cabinets or a fresh paint job? New appliances? A new breakfast nook?
Once you have your list, break it down into needs and wants. This will help you decide between what changes you can make and which you can do without if the project runs over your budget. Once you have your list, you can talk to a contractor to get an idea of how much the total project will cost.
Get reliable project estimates
You can do your own research to get estimates for how much your project will cost, but the most effective route is to talk to multiple contractors and get estimates for your project. Discuss in detail what you want to accomplish, what you want to spend, and what your timeline is.
When requesting estimates from contractors, your best approach is to be as specific as possible, and get quotes for the exact same work from every contractor so you can get an accurate comparison. For example, if you know which appliances you want in your kitchen renovations, what type of flooring, or what type of paint, let your contractor know. It could affect your estimate.
Account for living expenses during the project
Finally, when establishing a budget for small home renovations, remember to budget for expenses you will incur while the project is ongoing. For example, if your kitchen is under construction, will you need to eat out? If your bedroom is being remodeled, will you need a hotel room? Will you need to board your pet while contractors are working in your home? Adding these expenses to your budget can make the renovation period less stressful.
Here at Reliable Home Improvement, our goal is to create beautiful spaces that fit your needs and your budget. Need basement refinishing? Needing home additions? How about bathroom remodeling? Contact us today for an accurate quote on efficient, high-quality, and customized renovations of any size for your home!