Will setting a budget be the most fun part of your home renovation? Probably not. Will it be essential to the success of your project? Absolutely!
Every successful home renovation project starts with a realistic budget. The budget is the foundation for which all design decisions are built on. There are several factors to consider when setting a renovation budget — house goals, financing options, and anticipated improved home value are a few.
We’re here to guide you through some renovation budget basics:
Flip or Forever
Goals are always good! Know what yours are before you get started. When setting your renovation budget think about how long you plan to own the home. This really helps put a renovation project into perspective. Is this a house you plan to fix up and flip? If so, obviously you will want to set a smaller budget and prioritize projects accordingly to maximize equity. If this is your forever home, a bigger budget will help you to get exactly what you want so you can enjoy your investment over many years.
Self-funding a renovation project is an option for some, but not everyone. Financing a renovation project will depend on if you already own the home or are preparing to purchase the home. If you already own the home, a home equity loan or refinance are likely your best options. If you have yet to purchase the home a renovation mortgage loan that includes renovation funds tied to the improved value may be an option. Having a professional design rendering and plan of the renovation project handy when talking to lenders is helpful in securing the necessary financing to complete your renovation.
Prioritizing a renovation project usually has a lot to do with resale value. Over-improving a home will ultimately lead to less equity or even a loss at resale. For many years, homeowners have received a great return on investment with kitchen and master bath remodels. Recently, outdoor living investments in covered porches and 3-season rooms have joined the list! New builds often include a covered outdoor gathering space as an extension of the living room. These spaces may include a seasonal mini-kitchen, bar seating, fireplace, and plenty of comfy lounge space.
A buffer budget helps guarantee success and alleviate stress. Set aside extra money in your renovation budget for surprises — because we all know life is full of them. Most designers require a contingency budget (usually 5-10%), which works like a checkbook with any balance funds returned once the project is complete. If you are rolling renovation costs into your renovation mortgage loan include a buffer budget in your pre-approval request to avoid the need for additional financing after closing.
Experts Make it Easy
Working with an experienced designer can help you to prioritize your design goals, secure financing through partner lenders, invest wisely based on area norms, and ultimately maximize your budget. Hiring a professional to navigate a renovation project start-to-finish also helps to avoid costly mistakes and unnecessary setbacks. Experience pays off — an expert’s opinion is a valuable renovation tool.
Imagine less worry, less work, and more wow! Everything Home’s experienced designers turn unique budgets into beautiful spaces every day. We would love to chat about your renovation project, schedule a quick phone consultation with our team here.
Happy Home. Happy Life.