The prospect of upgrading or renovating your home can be very exciting. The fresh new look, additional space, and modern appliances can all help to increase the comfort (and value) of your home.
On the flip side, major renovation projects can feel daunting and come with unexpected challenges, like delays or cost overruns. Both can be frustrating when all you want is to get the project done, so you can settle in.
Going over budget is a common concern when planning a remodel. It’s not unusual to hear of projects costing more than expected, delays that disrupt day-to-day life, and other not-so-pleasant outcomes.
So how can you have the remodel that you want at a price you can be comfortable with?
Over the years, I have overseen and managed a number of remodeling projects, working with architects, builders and engineers. Here are some tips and insights gleaned from my personal experience.
Create a realistic budget and stick to it as much as you can
Before you start hammering away, I recommend putting together a budget. Doing so at the start can help save you from a lot of hand-wringing down the road.
It can be difficult to get the numbers exactly right because, as with any big project, you’ll likely run into unexpected costs along the way. To help set a realistic target, it’s a good idea to plan on the project costing more than your initial budget. Consider adding a 20% cushion up front. This way, you can roll with any extra costs that you may run into during the project.
Knocked down the wrong wall? Broke a pipe? Once the initial panic subsides, that cushion will come in handy for repairs.
Setting a budget is a good first step, but it’s also important to commit to it. As your project gets underway, it can be all too easy to say, “Yes, let’s add this while we’re at it.” Tacking on little extras here and there might not seem like much in the moment, but that’s how many projects can go over budget. From my experience, I’ve learned a rather universal truth about home improvements: Every little thing adds up.
Sticking to your budget requires discipline. And this can mean resisting the temptation to pay for upgrades that were not part of the original plan.
10 cost-cutting tips for your home remodel
An important consideration before starting a remodel project is to determine if it’s more cost-efficient to demolish and start from scratch. It can be worth crunching the numbers to see your options.
Also, if you decide to pay for a contractor, I highly recommend checking references. Don’t be shy about asking for examples of their work and an estimate. You’ll want to see what you’re paying for. If the references, work quality, and price are in order, you’re probably off to a strong start!
That said, let’s look at some cost-cutting moves for you to consider.
1. Know your limits. Home renovation shows have inspired many people to take on the challenge of a remodel themselves. DIY aficionados can often save money by going hands-on and feel a sense of pride and accomplishment after a project is completed. But keep in mind that a project can turn into a disaster if you don’t know what you’re doing. It’s important to do your research on what you can handle versus what should be handled by a professional.
2. Consider your personal routine and the family. If you’re a DIYer, you may have already lived with a project underway (or underfoot). If you decide to go with a contractor, however, be sure you’re as clear as possible when it comes to their work schedule. Agree on start and end times that cause the least disruption to your family’s day or the contractor’s ability to work.
Getting the kids involved can be a great learning experience for them, but it can also be dangerous. Whenever there are kids involved in the project, be smart, age-aware, and safety-conscious. And don’t forget about the family pets. Their safety is important, too!
Consider designating a renovation-free zone somewhere in the house (if possible.) The family can gather there to relax and retreat from the chaos of an ongoing remodel project.
3. Get creative with your “sweat equity.” If you use a contractor, you may be able to realize significant savings by handling some of the labor yourself. For example, if you feel up to the task, doing your own daily cleanup rather than having the contractor’s crew do it is one potential option. You might also save on delivery costs by picking up materials yourself. If you don’t have a pickup truck suitable for this purpose, you may be able to pick up a good used utility trailer and then sell it when the project is done.
4. Visit the recycling center. You may also be able to save on the cost of materials by checking out local recycling centers. For example, there are hundreds of independently-owned Habitat ReStores across the country operated by local Habitat for Humanity organizations. These stores accept donations of building materials and sell them at a fraction of the price you’d expect to find in a home center or lumber yard.
However, keep in mind that if you’re using a contractor, many of them won’t work with salvaged items or even homeowner-supplied materials because they don’t want the liability if something goes wrong.
5. Consult with an architect. Your remodel project may not need full-scale architectural drawings. Still, you may benefit from tapping into the knowledge and expertise of a seasoned professional for a design consultation.
Many architects will consult for a flat fee and sketch out a few solutions that could save you money. If needed, you can take those sketches to a builder or a drafting service. They can usually produce formal construction drawings without you having to pay the cost of a full architect commission.
6. Consider design alternatives to reduce cost. The kitchen is always a popular remodeling candidate. Expanding its size, putting in new appliances and updating cabinets can breathe new life to the kitchen. But these renovations can come with a big price tag. Consider whether you could increase the efficiency of your kitchen in the space you already have
For example, an alternative to a gut renovation might be to add pull-out inserts to existing cabinets. Or, simply add new cabinet doors or a fresh coat of paint. Skipping the big additions and making small changes instead might save you thousands of dollars. And you could still end up with a kitchen you’ll enjoy for years to come.
7. Be careful about moving fixtures. If your plan calls for moving major fixtures, like sinks or toilets, to a different location, this can run up the cost. If you absolutely have to move them, consider capitalizing on the opportunity to upgrade pipes at the same time. It could save you money in the long run.
8. Plan with stock sizes in mind. If you’re building something 10 feet wide and the materials come in 4-foot sections, you might consider seeing if it costs the same or less to build it 12 feet wide instead. The same applies to windows and doors. Stock sizes are typically more affordable.
9. Donate vs. trash. When starting a remodeling job, it may be worth inviting the local Habitat for Humanity office to pick up your old materials and fixtures for later resale. Some experts estimate as much as 85 percent of a house is reusable. By donating, you can save space in the landfill and help a good cause.
10. Have fun! Enjoy the process – it’s a chance for you to exercise your creativity and bring your vision to life. Relish in the fresh new look and the more comfortable space you’re creating. You got this!
The bottom line
Renovating a home can be daunting, but rewarding as well. It can really add to your home’s wow factor, increasing its value and impressing your friends, family, and guests alike.
While remodeling can be costly, it’s possible to update your home without breaking the bank. Creating a realistic budget up front, having the discipline to stick to it, and using some of these cost-saving tips are just some of the ways to help ensure a successful renovation.
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
Information and opinions expressed by individuals other than GS PFM employees do not necessarily reflect the view of GS PFM. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
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