The first step of a home renovation in Albuquerque is budgeting, and it is not an easy task. A mistake could leave you with a drained bank account and no idea how to finance the remainder of your remodeling project.
Here are four key tips to help you budget properly the first time:
- Think Beyond Labor Costs
You must include more in your remodeling budget than what the contractor will charge for labor. To complete their projects, they will need supplies and building permits. These materials might have steep delivery fees, depending on where you live. These are just a few of the variables that affect your budget!
There are so many things you need to consider. Are you planning to live there during the remodeling process? To make the construction area liveable, you’re going to have to spend extra money. In order to ensure that the air you breathe is safe, you’ll need to purchase an air purifier. To block off unsafe areas of the home, you’ll need plastic tarps, tape, and other materials. When your kitchen is going to be altered, it’s going to mean taking out or ordering takeout until the area can once again be used.
What if you intend to leave during the home renovation? If you are temporarily living in a hotel room, an Airbnb, or a rented apartment, you will be required to include those costs. Your budget could be significantly impacted by these costs.
What other costs should you think about?
- Childcare (daycare, camp, babysitting, etc.) for kids who need to be away while contractors are working
- Petcare (daycare, pet-sitting, walkers, kennels, etc.) for pets who need to be away while contractors are working
- Storage costs for furniture and other valuables
- Cleaning/sanitizing when work is done
- Raised energy costs
- Give Yourself a Buffer
Make sure your budget doesn’t equal your estimated costs. It’s impossible to predict all the expenses that will arise. When you set such a strict budget for yourself, you are bound to overspend and cause yourself unnecessary stress.
Therefore, what is the best course of action? To account for unexpected expenses, add 10-20% to your budget. In this way, you will avoid immediately going over budget and getting into financial trouble.
Although it might seem unnecessary at first, a large number of homeowners underestimate how much they’ll spend. In 2019, 31% of homeowners went over budget during home remodels, according to a Houzz survey. Only 3% of them went under it.
- Prepare for Surprises
Remodeling your home could come with unexpected and costly surprises. What type of surprises can you expect? During a renovation, your contractors may find bugs behind walls, mold, water damage, faulty wiring, asbestos and code violations. You can’t ignore these problems. They must be addressed.
Those surprises won’t just slow your contractor’s progress – they’ll raise your costs as well. So, what should you prepare in terms of a budget for this? To pay for these costs, you can use the buffer in your budget. Your buffer was designed for just such a situation. There’s nothing quite like a safety net to cover emergency expenses without breaking a sweat.
In case something goes wrong and you need to save money, you can also make a list of projects you can drop. Choosing an expensive countertop for the kitchen or installing a barn door in the living room is not a necessity, and you can add these later in the remodeling process. If you need to cover the unexpected costs, you can sacrifice one of these projects.
Before committing to any throwaway projects, make sure to discuss your list with your contractor. You don’t want to set expectations for work that you can’t guarantee will be accomplished.
What if your budget is not sufficient? You may not have enough to cope with a surprise. An emergency loan could be applied for in that situation. Do your research before you submit that application.
In the end, you can’t plan for every little thing that will come up during a remodel. But if you plan ahead carefully and make room in your budget, you’ll be better prepared for success.
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