Renovating a Home? Here Are the Costs to Anticipate

Renovating a Home? Here Are the Costs to Anticipate

Summer and fall are the high season for real estate, so it’s no surprise they’re also prime time for home renovation. But before you start planning the renovation of your dreams, there’s probably one big question on your mind: How much does renovating a home cost?

Whether you’re planning a remodel now, planning on making renovations after purchase, or laying the groundwork for next year’s remodeling, budget is the big first step.

Here’s what you should consider when figuring out the cost to remodel a house:

1. Find out what building permits you need and what they cost

Depending on how major your project is, you may need a building permit. This alerts the local government that you’re making changes to your home, so an inspector can monitor the work and ensure it’s up to code.

The rules vary by city and state, and so do the costs. For example, you generally won’t need a building permit to give your kitchen a cosmetic refresh, but if you’re planning to make any major changes to the kitchen’s layout, you’ll likely have to apply for at least one permit to make sure everything is above board. But before you get too far into your work, do your homework.

If there are renovations being done that require a permit and an inspector finds out you’re doing them without, they could fine you.

Fines will vary based on the exact type of work you’re doing on your home, but you may end up paying thousands of dollars out of your pocket if you don’t get the appropriate permits. If you’ve been building something extra on your property, they could tear that down, too.

Beyond those immediate consequences, unpermitted construction on your property can be a nightmare when it comes time to sell your home. Check off this cost of home renovation up front, and make sure to research online and talk to your contractor about it.

2. Decide whether you’re renovating a home with a contractor or going DIY

Either way, you’re probably going to be paying the same amount for fixtures and materials. The cost difference is in the labor. Remember, when you hire a contractor to oversee a project, you’re not just paying for their time. You’re paying for their expertise, too. Just like we recommend finding the right real estate agent when buying and selling, it helps to find a contractor you trust.

If you decide to DIY it, make sure you feel comfortable with your own expertise. Making mistakes can cost you way more money in the long run. And, there could be serious risks to trying to tackle projects like electrical rewiring, which could be dangerous if done incorrectly. Assess what you feel confident in updating yourself, and where you’d like an expert’s help

And, of course, you want your remodel to look good! If that DIY bathroom remodel looks DIY, then you’re not getting the added long-term value that comes from renovating a home. What you do now might woo home buyers later.

3. Measure your square footage so you can estimate the cost of materials

Knowing how to measure the square footage of your house is crucial, because many of your materials will be purchased by the square foot. Floor tile, backsplash, countertops, cabinets, paint — you’ll need to know square footage to budget these supplies.

You might love that one fancy flooring material, but how much will it cost to cover your whole room with it? Costs per square foot can vary wildly between materials, so it’s worth doing the math before you decide to refresh your entire kitchen with Carrara marble.

Know the dimensions you’re working with up front so you can make educated estimates.

And for anything you’re budgeting, add 10% to the square footage — you’ll want to buy extra supplies of anything just in case. In the cast of anything fragile, like floor or backsplash tiles, there’s always a chance that the raw materials can be damaged in transit, and if you’re unable to pay a little extra for more material, you may be out of luck.

4. Figure out whether your work is structural or cosmetic

How much does it cost to remodel a house? It depends what you mean by “remodel.” If you’re just replacing the fixtures and flooring in a bathroom or kitchen, that’s one thing. But if you’re moving or replacing plumbing, electrical wiring or even walls, then the costs are going to add up a lot faster.

Keep in mind how much you know about your house, too. When was it last updated? If your house is on the older side or it’s been decades since the last remodel, remember that cosmetic renovations could shed light on unforeseen structural issues like cracked foundations, shoddy floor joists, or termite damage.

Preparing for those extra costs will help you stay ready for anything that may come your way during the renovation or remodeling process.

5. Decide where you’ll spend and where you’ll save money

Make a list of need-to-haves and nice-to-haves. If you absolutely want a jetted tub but don’t care as much about the bathroom tile, make budget adjustments accordingly. Do your research before you start picking fixtures for your home: Once you’re attached to something, it’s hard to find a replacement.

Assess flooring, fixtures, paint, appliances, windows, trim, and anything else you’ll need to decide on. Choose what really matters to you, and what updates will have the highest ROI in the long run. For instance, investing in eco-home features like energy-efficient windows or an eco-friendly HVAC system might up your resale value later on.

Certain cosmetic upgrades like high-end countertops and hardwood flooring are also great ways to boost your home’s resale value down the road.

6. Save an emergency fund in case costs run over

Talk to anyone who has done a home remodel, and they’ll say the same thing: When it comes to estimating the cost to remodel a house, expect the unexpected. Just like during the home-buying process, you want to be careful about your budget and have a contingency plan.

The exact amount you should set aside as a contingency varies, but many sources recommend setting aside at least an extra 10% of your renovation budget. If you’re financially capable, setting aside up to 20% can give you further peace of mind.

Make sure you have more cash available than you anticipate spending, so surprises don’t become catastrophes. You can also take what you do know into account to guess what might come up.

If you have an old house, then knot-and-tube wiring, old plumbing, and major leaks are all potentially waiting behind the walls. If no surprises come up, then great! Now you have a vacation fund — or a head start on your next remodel.