Renovation Costs You May Not Anticipate
I confess, I am a professional Realtor, and I just added a second bathroom to my modest home at a cost of 230% of what I expected after first meeting with my contractor! What happened? A number of problems that you can avoid by doing the following:
- Be Clear On Costs & What’s Included – Be clear on what materials AND labor will cost you and what contingencies there might be. Get it in writing! No one can predict everything, for instance, predicting that you’ll incur the cost of putting your dog into daycare because the construction makes her crazy and sleepless. You can however uncover more potential costs by interviewing at least two contractors who may each give you a heads up on a cost that the other missed. Be sure to verify if plans and permits are included in the cost…and how much time obtaining these will add to the job.
- Don’t Forget to Estimate the Cost of Eating Out, Hotel Stays & Obtaining a Dumpster – These items may be needed to help you maintain your sanity and they definitely add to the cost of your job.
- Consider Your Time and Effort – If you are considering doing some of the work yourself, look carefully at what that time and effort may cost you by keeping you from other things you could be doing.
- Consider Whether You Will Need Child Care, Rental Office Space or a Cleaning Service? Will Your Utility Bills be Higher Than Normal? – These expenses may all be logical but many people will not calculate them ahead of time. Will you and your children need to work/play off-site? Will cleaning by a 3rd party be necessary to help you maintain your sanity? Will your contractors be wasting your air conditioning or heat; leaving windows and doors open?
- Look at Parking & Storage Options to Avoid Future Cost – Contractors want their equipment and materials stored where they will be safe. Providing a safe place will most likely put your own personal belongings at risk. Landscaping can also be completely sacrificed due to wheelbarrows, heavy tools, large equipment and stored renovation materials.
I frequently hear renovation numbers that sound very economical, portending a greater value increase than the cost of the job. But be sure the numbers are all in before you brag about your low renovation costs. AND, save every penny’s worth of receipts and invoices for when you compile your annual tax return or when you sell and may be confronted with capital gains tax.
SD County Escrow Team
P.S. – This was a guest post courtesy of a local Realtor.