No one should attempt a project without spending limits, creating financial instability for themselves and their families. You cannot afford to avoid the budgeting process.
While budgeting can be challenging, there are several standard rules and tools that can assist you in getting a clear picture of the funding needed to accomplish your home remodeling goals.
Follow the five to 15 percent rule
The five to 15 percent rule is a widely accepted guideline within the building and remodeling industries. It details that your remodel project should cost no less than five percent and no more than 15 percent of the current value of your home. The national average currently sits at eight percent.
A general rule of thumb is that major upgrades, such as a living room addition or a bathroom remodel, typically cost $100 to $200 per square foot, according to House Logic.
Each element of the remodel has a percentage of its budget dedicated to the change, depending on the scope of the project. The National Kitchen and Bath Association highlighted what you can expect to pay for each element in a kitchen remodel by percentage of the remodel budget. For example:
•Cabinetry and hardware: 2%
• Installation: 17%
•Appliances and ventilation: 14%
•Walls and ceilings: 5%
•Design fees: 4%
•Doors and windows: 4%
•Faucets and plumbing: 4%
Another popular home remodeling project is the bathroom, which is dependent on a variety of factors. The most significant is the room’s size. The suggested budgetary breakdown by material cost is as follows:
Day-to-day costs often get overlooked during the home remodeling process, causing you to go over budget.
For example, if you are updating the kitchen, you may need to create a space for a temporary kitchen where you can store nonperishable food and prepare meals. Additionally, you may have to order takeout or go to restaurants more than you typically might.
If the remodel project is substantial enough, you may need to temporarily relocate. These are additional costs that need to be factored into the remodel budget.
Account for variables
There are multiple factors that go into determining a remodeling budget. Remodeling Magazine’s Cost vs. Value Report (released both by region and major city) is a great place to start. It provides the national averages for 36 common remodeling projects.
With all of the variables that can affect your budget, here are some factors to consider:
•Home Value: Take into account not only what your home is worth, but also the value of similar updated houses in your neighborhood. Home value often can be found online by entering your address, in order to get an interactive map with home values and additional information. It is important to note the value of similarly sized houses in your area that have been recently purchased at a higher value. If photos are provided, you should compare amenities, additions, and remodels.
•Motivation: You should make a list of factors that are motivating you to take on a remodel project. By seeing these aspects listed out, you will have better insight as to what you are hoping to accomplish with the project, and you will be able to readdress your goals of the remodel.
•Needs vs. Wants: Once your vision of the remodel has been further detailed with the budget constraints applied, you can gain a better understanding of which aspects of the design are based on necessities and what aspects are based on desires in the design.
•Future: Understanding your remodel timeline is essential toward understanding how far into the future you are willing to tolerate the stresses and challenges of the project.
•Size: The size of the space is crucial for understanding the variables that could affect the remodel. For example, if your kitchen is more or less than the national average of seven percent of a home’s total square footage, you may need to adjust your budget accordingly.
•Layout: If you know that you would like a feature of the room relocated, you may need to spend beyond what a basic facelift would cost. For example, if you are looking to move the kitchen island, you may need hire to an electrician and/or plumber, as well as purchase new fixtures to fit the design.
Get your trade professional’s opinion
Before you commit to a trade professional, you need to meet with them in the space being remodeled, so that they have a sense of how to approach the project, as well as how feasible your design may be.
Getting their opinion does not discount your own, but remodeling and construction may not be in your skillset; therefore, it behooves you to get further information, in order to ensure that your goals are met for the remodeled space.
Stick to your remodel budget
Setting a home remodeling budget means you should not go past its parameters. Respecting those boundaries requires discipline and teamwork between yourself and your trade professional.
The good way to navigate those budgetary limits is to create a spreadsheet of your anticipated costs, so that you can keep track of what you are spending.
Conducting a home remodel means sticking with the budget. The ProSource Wholesale team can assist in that process.
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