Renovating or remodeling your home can be an exciting endeavor, but it also requires careful financial consideration. There are many things you should be considering when budgeting for a home renovation.
When considering home renovation cost, a few factors that come to mind are the cost of the fixtures, cabinets, and flooring, and the cost impacts of disrupted daily routines, like meal planning if your kitchen is being renovated.
The most exciting part of this process for most homeowners like yourself, will be researching and selecting the fixtures and finishing materials you would like to have installed in your home (think about the things you will see once the reno is completed).
A good first step for people is to start a Pinterest board for inspiration. This can be helpful to capture the look and feel of what you like and also the level of finishes you are thinking. All of this will be helpful when engaging a renovation company or designer. So, do your homework and determine the level of finishes you would like. As these costs can significantly impact the investment amount of your renovation.
Your home renovations, however, are more than just the fixtures and finishes that you see. There are also other costs associated with a renovation most folks don’t usually think about. Some of these costs include:
1. Design and engineering fees:
When doing a large renovation, there will be costs for design work and engineering to make sure your vision of the renovated space is what you want and is achievable. These fees can vary depending on the complexity of your renovation. For a smaller project, these could be $1000-$2500.00 or more.
When your renovation is large in scale and complex dealing with multiple structural challenges or additions to an existing structure, these fees can range from $10,000 and up, or be a percentage based on the cost of the job which can be 5-10% of the project cost.
2. Interior designer fees:
You may need an interior designer to assist you with picking out paint colors, flooring, cabinets, counter tops, light fixtures, plumbing fixtures, appliances, etc. Depending on their level of involvement, the volume of selections, and time spent working on the project, you could see this charged as a per-hour rate, to a flat fee structure. Some designers will order the materials on your behalf and invoice the client the Cost + their markup. These markup costs can range from 10-25%
3. Project Management Costs:
Every project will require management of the various tasks, purchases, subcontractors, tradesmen, scheduling, documentation, and many more things that are required for a project to be a successful endeavor.
Sometimes these costs are included in the overall markup of the project costs and accounted for and paid out of the gross profit of a project. Most of the time these management costs are figured as hourly costs based on the amount of time spent managing the project by the length of time the project takes to complete.
In some cases, your contractor may charge this as a percentage of the cost of the project. It may be as little as 5% for projects requiring the basic level of management and involvement but could be as much as 10-15% for projects that require a dedicated project manager working through a complex and challenging home renovation.
4. Rental fees:
With home renovations that involve a large area of a home, or critical areas, like a kitchen remodel or master suite addition, it’s common In most instances you will have to move out of your home during the renovation process. This can present a challenge for you if you haven’t considered this as a reality of the renovation project you’re looking to have done.
5. Off-site Storage:
If you’re having to move out of the home during the home renovation, where will your furniture be stored during this renovation? Who will be responsible for protecting it, packing it up, moving it out, bringing it back, and unpacking it?
6. Containment, Dust Barriers, and Cleanings:
If you can stay in the home during certain renovations, then there are additional costs associated with containing the dust and debris and limiting the access to a construction zone from kids, pets, or others. During different phases of a construction process, it’s common to clean the job site, and this too can have a financial cost.
7. Contingency fund:
It is good practice to set aside an additional 10-15% of your total budget for unexpected expenses or change orders that can arise from a change in the renovation plan. Some of these expenses could be rotten wood found inside your walls that is discovered during the demolition process, or maybe there are electrical or plumbing issues that are uncovered, requiring for a code upgrade, or correction.
Most changes and additional costs to renovation projects usually result from the plan changing, or cost allowance overages. When the plan changes and items are added, or changed in the middle of a home renovation, this will usually impact not only the project budget but often the schedule too.
8. Permitting fees:
Most if not all renovations will require a permit. Make sure your contractor is obtaining a permit for the work being done in your home. If a contractor is reluctant to pull permits or have their work inspected this should be a major red flag for you. In some cases a project that is completed without a permit, or a stop work order is issued in the middle of a project can result in fines, and penalties to you, the homeowner.
In conclusion, you have a lot to consider and keep in mind when embarking on a home renovation project. Making sure you are budgeting for a renovation that includes costs like hiring an engineer and a designer involves careful planning and consideration.
By defining your project scope, estimating costs, including professional and other fees, and outlining your budget, you can ensure a successful and financially manageable renovation.
And limit the surprise costs that sometimes can catch a homeowner off guard. With thoughtful budgeting and a clear plan, you can transform your current home into the dream space you’ve always envisioned, making your renovation not just successful, but truly rewarding.
One Resource to better understand Cost and Budgeting for a remodeling project: The 2024 Cost vs Value Report compares average costs for 23 remodeling projects with the value those projects retain at resale in 150 U.S. markets. South Atlantic Charleston:
https://www.remodeling.hw.net/cost-vs-value/2024/south-atlantic/charleston-sc
