Here’s a great book designed to help homeowners with their home remodeling.
I like this book because it gives the homeowner specific information to increase their understanding of the home remodeling process and how to achieve success. Most importantly, the information is presented in an easy to understand way.
The book is called Remodel Success, Home Remodeling Done Right, On Time And On Budget by Monica D. Higgins.
Here’s an exerpt from the book:
BUDGET REALISTICALLY
Discover painless ways to shave your budget
A realistic budget puts the power in your pocket. You’ve heard the saying, “measure twice, cut once.” That’s a good metaphor for the budget, too. Once you’ve gone through the realization steps in chapter five, you should have a clear detailed side of what your ideal project will look like. Now it’s time to crunch the numbers and see what your budget will support – before you start the building process.
MONICA’S TIP:
Remember, your goal is to envision a remodel you
can afford to complete. So, be receptive to making
adjustments that will help you reach the remodeling
finish line.
FOUR REMODEL BUDGET BUSTERS
Unrealistic expectations can sink a project before it gets started. Unless you work in real estate or construction, you’re unlikely to have a solid idea of your costs until you do your homework. Some people base their budgets on what previous remodeling projects have cost, what friends tell them they’ve paid for similar projects, or what they see on reality TV. The problem is, costs go up over time, so what a project cost five years ago has no bearing on what it costs now. Your friend’s project might have used completely different materials, or been larger or smaller in scope, or been a do-it-yourself undertaking. Building and finish materials that are subtly promoted on home improvement reality TV shows are often donated to reduce production costs. In other words, you can’t base your expectation of costs on anything other than an estimate for your specific project in the region where you live and at the time you want to do it.
1. Extras
Unless you have a very large bank account, you’ll need to decide between nice-to-have and must-have features. If the estimate you receive after your in-depth design phase gives you sticker shock, refer to the priority list you created in chapter one.
2. Challenging site conditions
For example, if the property is on a hillside lot with limited access, chances are that large equipment will not be able to access certain areas of the property. As a result, your contractor will need to figure in manual labor costs since that phase will take loner when compared with using equipment.
3. Unforeseen expenses
Always factor in a contingency – a predetermined amount of percentage of the budget allocated for necessary, unpredictable expenses unrelated to expansion of the project’s scope. Think of a contingency as protection against the unknown.
When budgeting for a contingency, you can either include it within the cost of each line item or it can be a single category of the overall construction budget. I prefer the latter approach because you can apply the contingency where needed. For example, some part of the project you thought might run over may pleasantly surprise you and come in at or under budget, while another item no one expected to cause a problem might create an issue that raises costs.
This is exactly what happened to one of my clients. The lower level of her home had water stains – evidence of a leak. However, the source of the leak was not determined until driveway excavation revealed a gap in the foundation. The existing foundation was built on piers with several feet between them. Over the years, the dirt eroded, leaving this gap. When the exterior wall of the house cracked (most likely from settling or perhaps an earthquake) it created an avenue for the water to enter. My client was “covered” because of a contingency was part of the budget.
4. Scope creep
This occurs when a homeowner hasn’t clearly defined the project. It happens during the design phase and can even happen during construction, and many small changes can end up making a big cost difference. This happens innocently: You may think that since you’re already redoing the bathroom, why not remodel the laundry room? Stop! Your scope is creeping. Be wary of phrases like “while we’re at it,” or “we might as well.” They’re warning signals that the scope is creeping. Once a project enters the building phase, new ideas become expensive change orders. Do your pocketbook a favor by nailing down your expectations in the design phase and sticking to it!
GETTING A HANDLE ON COSTS
Before you fall in love with the idea of remodeling your home, take a long, hard look at all of the costs involved. Here are the main costs to consider:
Professional design fees
Consultant fees
Permits/entitlement
Hard construction costs (materials and labor)
Landscaping
New furniture
New fixtures
Reserve against contingencies
When developing your remodeling budget, you not only need to consider the hard costs (materials and labor), but also soft costs such as architectural and engineering fees and permitting. Use the 20% to 29% rule: for every 410,000 in hard remodeling costs, budget $2,000 to $2,900 for soft remodeling costs.
Here are ballpark ranges for those soft costs, stated as a percentage of the total construction costs:
| Architect/designer (10%-15%) Consultants (6%-8%) Structural engineerSurveyorSoils specialistGeo-technicalHVACTitle 24 Energy | Permits/entitlements (4%-6%) Planning / ZoningBuilding & SafetyPublic Works |
Remember that at this stage you are will working with a conceptual budget provided by the designer that validates your proposed budget. In chapters ten and eleven we’ll discuss the bid process, during which contractors provide a real number based on construction drawings.
The three key factors that affect budget are time, qualify, and cost. I have yet to meet a homeowner who does not want quality work done fast and inexpensively. However, the reality is that you can only have two of these three criteria at one time. So pick the two you’re most comfortable with. For example, if you pick quality and speed, just know that it’s not going to be cheap. Why? Because if contractors do not have a large enough team to handle more than one project at a time, they’ll need to forgo other projects to get yours done at warp speed.
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