Renovation Cost Will Vary By...
• Type of renovation • Materials used • Geographic market • Finishes used • Resources used • Cost of Permits • Cost of cleanup • Contingencies/unexpected • Move or stay/storage • Your time invested
“At its simplest, cost is a function of materials, time and
labor, and local market conditions”
Qualified Preliminary Estimates
Get multiple preliminary estimates. This will give you a good idea of what to expect. But remember, until the entire project is designed, full specifications are completed and material selections are made these will only be an preliminary estimated cost range.
Design-Build firms that have the experience, knowledge, architectural designers, building consultants, and proper management staff in place that follow the quality control standards established in the National Association of Homebuilders publication, “Guidelines for Professional Builders and Remodelers” will be typically within 2-3% of each other in cost.
Inexperienced contractors operating out of their truck or garage should not be included in analyzing or establishing the projected budget cost range of your project, as they typically do not have the overhead associated with having the proper insurances, project supervisors, or management staff in place to successfully manage and complete a great project for you.
A good rule of thumb is this - whatever amount you’re zeroing in on – multiply it by a factor of 1.1-1.2 to cover changes, contingencies, and Murphy’s Law. Seasoned design-build firms know that the unexpected always occurs. So just go ahead and plan for it.
If you’re like most of us, your list of needs and wants will exceed your ability to foot the bill. While the actual cost of renovation varies tremendously, you still need to establish a budget.
If you’re renovating for yourself or your family, a bank can help you figure out how much you can afford to spend, and how much you can borrow.
Generally, 20% to 30% of the value of your home is an acceptable amount to invest in the existing structure. For example, if your house is appraised at $200,000, it’s reasonable to invest another $40,000 to $60,000 in improvements. If you’re adding square footage to the house with an addition, this percentage can increase.
• What you may have set aside • What you can borrow and the interest rate you can get • What is a reasonable monthly payment? • How long you plan to live in the home
Maximizing the Return on Your Investment
How do you know if your investment is going to pay off? You may not be planning to sell any time soon, but you want some idea if you’ll recoup your remodeling dollars.
If you are looking at resale soon, do consider renovations that give you the most bang for your buck.
What do the experts say about the best value for your renovation dollar?
“When it comes to payback, these renovations have
the highest return on investment”
• Kitchen • Bathroom • Re-siding (for curb appeal) • Master suite additions • Attic bedrooms.
When looking at these statistics, remember that they yield average costs and returns; the values in your local area or particular situation may differ.
Sample of Cost vs. Value Information, 2008 National Averages
Project Cost Value at ResalePercentage Recouped Siding Replacement - Upscale$10,393$10,771103.6% Bathroom Remodel - Mid-Range $10,499$10,727102.2% Minor Kitch. Remod - Mid-Range $14,913$14,69198.5% Window Replacement - Mid-Range $9,684$8,681 89.6% Master Suite - Mid-Range $73,370$60,46082.4% Home Office Remod. - Mid-Range$13,143$9,569 72.8%
Remodeling Magazine, November 2008