Findings of a recent survey show that only a quarter of American homeowners who are planning home renovations within the next year or so have enough savings to cover the entire cost of a renovation project.
Around 52% of respondents admitted planning to make home improvements in the next year, with many aiming to complete a project in the next three months. Most cited wanting to renovate to increase their home’s value, many with focused on updating their kitchen and bathroom.
The Budget Conundrum
However, nearly two-thirds of respondents were off target with their budget. Most expected their home renovation project to cost less than $15,000 — an amount much lower than actual costs gleaned from the recent Remodeling Cost vs. Value report, which places mid-range bathroom remodels at $20,420 and mid-range kitchen remodels at $22,507 to $66,196.
Money Matters
When you’re doing a major home remodeling project, it is crucial to have a budget and to stay within that budget. Here are a few quick tips to pull your renovation off successfully without letting your finances get away from you.
- Determine your goals. Why do you want to renovate?
- Know the specifics. Decide what details you want, then crunch the numbers. Pin down decisions and select materials and finishes to help you formulate an accurate budget.
- Assess your financing options. If you need to borrow money for the project, consider options like a home equity line of credit (HELOC), so you can borrow money on an as-needed basis up to a certain limit, using your home’s equity as collateral. Alternatively, apply for a home equity loan, which you can pay back in monthly installments.
- Consider resale value. If you’re thinking about potentially selling the home in the future, it’ll make sense to focus on your potential return on investment.
- Get a “hard” quote. Instead of a free estimate, pay for a “hard” quote, where you’ll receive a detailed outline of the project’s costs and the timeline for the job.
- Set aside money for contingencies. Set aside an additional 10 percent to 15 percent in cash to accommodate unexpected expenses.
Get Help From the Pros
Successfully budgeting your renovation will essentially boil down to this: 1) set your priorities, 2) establish a spending limit and 3) stick to your budget. Don’t hesitate to call on the leading home remodeling contractors at DreamMaker Bath & Kitchen of Elizabethtown. To learn more about our products and services, simply give us a call at (717) 298-3830 or fill out our online contact form. Let’s start a conversation today!
