Are you looking to remodel? What’s it going to be? Your kitchen? New master bath? Basement? Take a look at these steps to help you determine what you need in order to make your remodel go as smoothly as possible.
Before anything else, you need to make a decision on where your investment and efforts will be going. If you have a remodeling budget but are unsure of where you would like to put your energy, it will end up wasted. Decide which area is used the most or will benefit the most from a remodel. Are your kitchen appliances outdated? Is there a new family member on the way and you need another bedroom? Determining where to spend your time and money is step one.
Once the project has been decided, you need to figure out what all will be and get an idea of costs. This doesn’t mean down to the last penny, but rather a figure in the range of what you have and what it will take to get the job done. There are great sources out there for those who need a place to start. These include http://bit.ly/czad0a, a 2010 report of costs vs. value, and http://www.nahb.org/. The latter is the National Association of Homebuilders, a great resource to have on your side when remodeling or making home improvements. Knowing what you want accomplished as well as a sense of what it will cost gives you a great foundation moving forward.
Now that you know what your project is and what it is roughly going to take, you are ready for the next and possibly hardest step, determining your budget. With a cash budget, it is easy to know exactly what you have to spend and where that fits within your project. Where the process gets tricky, however, is when you are borrowing or financing the remodeling budget. You need to know how much you are asking for and how much you will receive from potential lenders. You also need to budget for the monthly payments on this loan and determine how that affects your monthly budget.
When considering loans, most homeowners’ best option is a home equity line of credit (HELOC). This type of loan is based on your home equity and qualifies at a lower rate than most loans. Added benefits of this loan: the interest payments are tax deductible and it comes with a checkbook, so you pay your expenses as they come, up to the maximum allowance. However, it also offers an interest-only minimum payment, which means it can be quick to pile up debt.
After both your budget and the project have rough figures attached, it is time to see if you can move on. If the two numbers coincide with each other, then contacting a contractor is the next step.
Before you ask any contractor for a bid, you need to determine what exactly you want, down to the appliances, materials, color, etc. This way, each contractor knows what they are pricing for and there is no guesswork or surprises for you when it’s time to order and/or install the parts. If you are new to the appliance market, or know very little about countertops, consult an architect or attend a trade show. These are great resources to obtain some examples and more information.
Now that the specifics have been decided upon, you need to pick contractors to offer bids. Ask your friends, coworkers and relatives who they have used in the past or what they know about local contractors. Get references on the best in the business, ensuring the work will be top-notch.
Once everything has been selected¾the contractor, specific materials, and both budgets¾add 15% – 20% to the contractor’s bid for unforeseen expenses. While no one wants to admit it, there are unplanned expenses on every project. Make sure this number fits within your budget. If it comes out too high, listing the specific materials should give you an itemized report so you know how much each item will cost and where you can make reductions. If you explain what you are doing and discuss the issues with the contractor, they may be able to help you decide where some extra costs can be eliminated.
If you are contemplating a remodel, ask your local REALTOR for advice, contacts, common techniques and tips. Also, keep checking our blog for monthly updates on everything homeowners face.