Home Renovation Budget Planning: How To
In this article we outline five steps you should take when planning your home renovation budget. If you are reading this then you have probably been saving for some time in order to start the process of a home renovation. Picturing the final product is probably the easiest part of any home renovation. The financial aspects, however, require slightly more planning as they can sometimes be unpredictable and change at the last minute, depending on the nature of the work being completed.
Estimate Renovation Costs
As a rule, you should not spend any more on an individual room than the initial value of that room. When you are planning your budget it is worth acquiring an approximate valuation of your house. Calculate the floor space of the room you want to renovate as a percentage of your total floor space and work out how much it is worth before you begin planning.
Consider Home Renovation Loan Options
Most people can’t afford a home remodel as an out of pocket expense. If you’re planning on borrowing money to help fund your home renovations there are a number of options you have.
Refinancing. Depending on your arrangement with the bank, you might be able to refinance your mortgage at a lower rate. This can reduce your monthly payments. The difference in repayments can be saved as capital that may contribute towards your home renovation.
Redraw facility. Some home loans have a redraw facility which allows you to withdraw payments you have made in the past as cash. If you’re ahead of your mortgage repayments then you may be able to use some of the equity of your home to finance a renovation.
Personal Loan. Major banks and other lenders will be able to lend you money at a fixed or variable rate, depending on your income, assets and credit history. You will need a deposit to secure a loan for home renovations, so ensure you have some capital ready before you apply!
Get Quotes From Contractors
You have to be very specific in your negotiations with suppliers or they may charge you more based on their interpretation of the job description you provided. Provide extensive detail when describing the work you want complete, down to the materials used and the timeframe you have available for the project. Get quotes from multiple contractors and don’t necessarily go for the lowest bid because the quality of such a renovation may be lacking.
Stick to the Renovation Plan
As your renovation progresses, you may be tempted to request a small addition or change your mind about the design and style of your renovation. Even minor changes to a construction contract can be costly for the home owner, so consider carefully if you really need to make any last minute changes to your home renovation plan.
Account For Hidden Costs During Renovation
It’s wise to cushion your investment with a 10-20% float in the event unforeseen circumstances arise during construction and cost you more than you had originally planned. It’s rare that any home renovation project goes 100% to plan so it’s best to budget for more than you will actually spend.
If you’re planning a home renovation, you should call the suppliers at KBMS for a hassle free quote and over two decades of expertise. Archcon is fully licensed, certified and insured to complete all roof and pergola renovations in Sydney. If you’re looking to begin your next home reno project, contact our team for a free consultation about your project and site inspection. The work will be done to code and your 100% satisfaction, so call between Monday and Friday, 8:00-5:00pm on 0297507128.