Planning a home renovation budget is tough as it has to incorporate both the needs and wants of homeowners. A detailed plan and proper research are essential, especially since first-time renovation projects can be challenging. A realistic budget can help you execute the plan in much better ways.
Once a proper plan and budget are determined, it will be easier for property owners to make better decisions about renovation features, appliances, and finishes. Most home remodelling projects end up costing more than the initial budget plans. Therefore, it is important to consider several factors beforehand, while planning renovation projects.
Graana.com, Pakistan’s smartest property portal, brings you a complete guide to home renovation budget planning and factors affecting the renovation process.
Benefits of Home Renovation
Property renovations are mostly planned due to two main reasons: first, when a buyer purchases a new property and wants to personalise it according to their needs; secondly, if a property is getting old and there is a need to remodel it. In both cases, renovation comes with certain benefits:
- Improves the functionality of the property.
- Enhances the value of property
- Lowers energy costs
- Increases space
- Changes the style and aura
All of these help property owners in maintaining the value of their property over time. Moreover, it allows them to keep up with the modern trends of architecture.
Factors Adding to the Hidden Costs of Home Renovation
Inaccurate calculations while planning a renovation project can add up to any hidden costs. These miscalculations can be due to several factors. Therefore, before creating a realistic home renovation budget, it is essential to identify those factors, such as the following:
- Obtaining permits
- Hiring the wrong professionals
- Surprising structural changes
- Arranging a rental property
- Cleaning and disposing of waste
- Electrical and water works
- Pest damage control
How Much Does It Cost to Remodel a Home?
To estimate the cost of remodeling a property, its overall value comes into consideration. For most renovation projects, it can account for about 15-20% of the actual value of the property. If renovation costs exceed this limit, it can be a burden on the owner’s budget.
Renovation work for an older property is likely to eat up more budget than that for relatively newer properties. If the wiring, plumbing, and all other necessary features are not updated, the budget is going to exceed the limit. Prioritising the project by room and floors will help in devising a feasible budget that will not burden other expenses.
Factors like the cost of the renovation material, property area, types of the works needed, and others make up for the total cost of the project.
Steps to Create a Detailed Home Renovation Budget
If the remodelling work is done in proper steps, it can help save a lot of money. The following are certain steps that can help you create a detailed home renovation budget:
- Prioritise remodelling needs
- Create a renovation plan with budget estimates
- Request bids from multiple contractors
Let’s discuss these steps in detail.
Prioritise Remodelling Needs
Most property owners start renovation work without realising which changes are actually necessary and which are not. This leads to budget miscalculations. Prioritising remodelling needs can prevent such scenarios Before planning your renovation project, ask yourself the following questions:
- What is the current condition of your property?
- Do you want an all-property renovation project or target a few sections?
- What is your overall budget?
- What do you want to achieve from your project?
These questions will help determine the goals and plans to execute the renovation project.
Create a Remodelling Plan With Budget Estimates
After setting the goals for the project, it is essential to create a detailed plan that will outline all the processes in steps and the budget that needs to be allocated for each phase. It will help in communicating the exact needs of the project to the contractors. Nowadays, property owners can easily find online home renovation budget templates that can help them in creating a detailed plan.
To develop the plan with cost estimates, the following steps can help:
- Make a spreadsheet of each portion of the project.
- Use resources to estimate labour costs of architects, engineers, plumbers, electricians, and other contractors.
- Choose the portions, fixtures, and finishes that you are planning to work on.
- Make a checklist about the cost of materials such as paints, knobs, tiles, flooring material, faucets, and others.
- Include the cost of appliances, their installation, and delivery.
- Consider the costs of an alternative rental property.
- Do not forget to include the cost of taxes.
If you create a plan while considering all these factors, there are lesser chances of over budgeting.
You can use the following template as a sample to plan your renovation with a budget estimate.
Request Bids from Multiple Contractors
After creating the renovation budget according to your priorities, finding the best contractor is the next step. Local companies are generally the best options as they are aware of the conditions and building laws of each area. You can find suitable options by checking out each company’s customer reviews and asking them to submit bids for the project.
After contractors have submitted the bids, the following steps can help you choose the right contractor:
- Conduct interviews and check their resources.
- Have a clear understanding of your project plan and budget.
- Communicate what you want and need out of your project.
- Make sure that the contractor completely understands your needs and proposes feasible solutions.
- Communicate the renovation contract properly to the contractor.
- Discuss the ‘change-clause’ of the contract in case of any unexpected changes during the project.
Sometimes contractors bid lower than what you initially proposed. They try to take you in confidence by proposing several solutions to your project. However, such contractors are not recommended; They tend to make mistakes that can later result in overbudgeting.
Competitive bids that offer better solutions and suit your budget are the best options to choose from. However, if the competing bids are proposing more than your budget, you should either negotiate with the contractor or postpone the work. It will give you time to save more money and execute the project at the right time.
Tips to Save Money During Home Renovation
It is also essential to decide where you can cut corners during this process as most property owners also have to manage other expenses. The following tips can help save money during home remodelling projects:
- Be your own project manager: It will provide you with the opportunity to handle everything yourself. If you solely rely on the contractor, there are chances that you might not be able to keep track of the project’s performance over time.
- Order everything yourself: Contractors generally charge an hourly fee to purchase materials. If you do all the shopping yourself, you can save a lot of money.
- Recycle old material: During the demolition of an old property, several materials can be reused and recycled for use later on, which can cut down costs.
By taking these factors and these measures into consideration, a very balanced home renovation budget can be planned. It will not only help save the money, but also execute the plan in the best ways.
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