Budgeting for Your Home Renovation
If you’ve just made the decision to do a home renovation or remodel, you may not know where to begin figuring out what to spend. How can you possibly determine how much a renovation will cost?
Proper budgeting is key to the success of a home project, ensuring the project runs smoothly and the result meets all your wants and needs. It’s important to have a budget in mind (naturally), but also to share this budget with your design/build firm. We’re here to shed some light on building budgets.
How To Determine Your Budget
Most important is to figure out what you can afford and what you're willing to spend. Whether the number is $40,000 or $200,000, it's important to have an upper threshold number and to make sure this number makes sense for you.
If you’re planning a kitchen remodel but know you want to redo your bathroom down the road, you may want to take that into account when budgeting for the first project. If you’re updating your forever home, you may feel comfortable spending a bit more to get exactly what you want. If you’re planning on selling in the future, you may want to consider ROI for your remodel. No matter the circumstance, it’s up to you to decide what you can and want to spend.
Beware Internet Research
You may be tempted to try and find out exactly what a new kitchen or bathroom costs on your own, but we advise against spending a lot of time "researching" online because it almost always leads to misinformation and inaccurate expectations. Here are a few reasons why:
Scoping out a renovation—such as a kitchen, bath, or whole house—is a specialized skill. For example, if you don't know about all the different brands of cabinets that are available, you won't know where to look or what the costs are. A design/build firm's job is to help you understand the different options and price points.
The problem with researching costs on your own is that so many of the "costs" you'll find out there (i.e. on the Internet) are often misleadingly low, not to mention they vary greatly by region. If you come in expecting to pay Arkansas prices for your home in Rhode Island, you’re probably going to be disappointed.
You may think you've researched all the necessary costs, but there are likely things you missed. From ventilation and heating to plumbing and electrical, there’s a lot that goes into each project and a design/build firm will help you budget for all of it.
However, if you're looking for a starting point to give you an idea of what renovations might cost, you can check out Remodeling Magazine's annual cost vs. value issue to view the average costs of common remodeling projects by region.
Decide What You Want Out of Your New Space
There are numerous decisions to make that will influence your budget, from features and finishes to the materials you choose. In terms of doing your homework and preparing for conversations with design/build firms, it's better to consider the following:
How are you going to use the room you want renovated?
Do you want a large tub in your master bath and his and her sinks? Is your kitchen a focal point in your house, a place where your family will spend the most time? Is that new room you plan on adding to the third floor going to be an office or a nursery?
A well-designed space is perfectly suited to both its function and your lifestyle. Try envisioning yourself in your new rooms to get a feel of what you expect, want and need from it.
Which features are important to you?
Create a wish list and a must-have list. Feel free to include everything you can dream of. Later on, it may come down to choosing which to fit into the design or which to spend a portion of the budget on, so consider prioritizing these items according to which are most important. But, taking everything into account now will make those decisions easier in the future.
Create a Mood Board
What color palettes do you like? What are your favorite types of cabinets? What are some rooms you've seen that you love and why?
Whether you pull out clippings from magazines or you create virtual mood boards on Pinterest or Houzz, make sure you spend some time thinking about these things. The more examples of your desired features and style that you can show a design/build firm, the better they’ll be able to create your dream space.
Sharing Your Budget with Your Builder
A reputable design/build firm won’t spend your whole budget simply because that's the number you threw out there, so don’t be afraid to be honest. The firm's goal is to stay within your budget and deliver a design and final product that you're excited about. That’s why it’s so important to share this number with your design/build firm—so they can work with you to find the best solution for you and your budget.
There are two ways to approach the budget discussion with your design/build firm:
You can go in saying you have a firm budget of $X and then asking, "What can we do with this budget?"
Or you can provide your wish list, ask how much it will cost, and then start making changes or cutting back from there if need be.
The Bottom Line:
You may end up spending your whole budget or the firm may come in under your original number. It's also possible that your budget evolves as you go through discussions and the design process. The goal is to make your wish list and budget come together, and that’s what a design/build firm is there to help you accomplish. In sharing your budget with the firm, they can guide you in the right direction from the start, without wasting time or money. The bottom line is this: you control your budget. Only you can say whether a number works for you or not.
Conclusion
Renovating your home can be fun, exciting, and, yes, stressful. The stress often results when plans derail due to budget issues, which then derail timetables. By focusing on and sharing your budget up front, and by working with a qualified design/build firm, you can avoid much of the stress.
It's your home. Your renovation. Your budget. Remember that. And enjoy the process!