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According to the U.S. Houzz & Home 2021 Renovation Trends study, homeowners who renovated their properties in 2020 spent an average of $15,000, with the top 10% of projects costing $85,000 or more. Before embarking on a home improvement project this year, however, it’s wise to know that whatever your budget, you’ll likely end up spending more.
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Here’s a look at some common household projects and potential pitfalls that could drive up your spending.
Cost overruns
No matter how generous your budget is, cost overruns will happen, and Danielle Harrison of Missouri-based Harrison Financial Planning says you need to plan for all eventualities.
“As a former commercial lender, there was a standard rule that you over budget and then add 20% for overspending,” she said. “Typically, you will also want to add another 20% over the life of the project. This is the case for most construction projects – new construction, renovations, residential and commercial.
What could go wrong:
You could change your mind about finishes and accessories, or supply chain issues could mean the tile, sink or chandelier you ordered isn’t available, and similar options all cost more. Dear. Or the problems could be much deeper.
“With renovations, you’re essentially redoing someone else’s work,” said Ben Neely, president and owner of luxury builder Riverbend Homes in Texas. “Even with your best estimate of how someone built the space, you’re still basing your bid on a number of assumptions. The biggest cost overruns I see are on renovations where you expand a space and/or reroute plumbing and electrical.
Neely added: “Expanding a closed kitchen, for example, is about the structure of the house and often about reactivating the mechanics. When you need to expand rooms and move walls, you need to be aware of how those walls support other parts of the house. If your remodeler opens up the ceiling and finds that all of the ceiling joists are under-supported, an expensive beam or complete replacement of those joists can be an expensive surprise. Also, when you open up walls and find that the electrical or plumbing was not up to code, it can be a costly addition.
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Open area surprises
One of the biggest trends of the past two decades has been to remodel older homes to create an “open concept” floor plan. This means removing walls and doors between kitchens, living rooms and dining rooms to create one large space instead of a collection of smaller rooms. Sometimes surprises will arise that could throw the job thousands of dollars above the estimate.
What could go wrong:
“Surprises can be hidden behind walls and floors,” said Teri Simone, kitchen designer at Nieu Cabinet Doors.
“Opting for an open-concept floor plan can often increase the cost of the project – so it’s best to consult with an architect/engineer team before starting any demonstration. Particularly when walls are removed, it is best to know the cost of the correct beams and support before you begin. On TV [home renovation shows] there is often the unexpected structural support required, which can quickly increase costs.
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Wide range of cooking options
The average full kitchen remodel will cost between $30,000 and $80,000, and that includes appliances and cabinetry — two big-ticket items
“It can be difficult to budget for a renovation in this part of the house because there are so many factors that will impact the price,” said Kelly Marohl, owner and designer of The Greenspring Home.
What can go wrong:
One factor that can often add unexpected costs to a kitchen renovation is if appliances or plumbing fail to meet safety regulations, Volodymyr Barabakh, co-founder and project manager of building contractor Structural Beam told Chicago. “During a renovation, plumbers and electricians can spot unexpected regulatory violations and advise you to fix them now rather than later, to save on future problems or costs.
“You may find that your old fuse board needs replacing or structural damage has been discovered that you did not account for when budgeting. However, it is always best to prioritize resolving them, to protect yourself from future liability.
Related: 8 Affordable Ways to Upgrade Your Kitchen
Budget challenges for the bathroom
No two bathroom budgets are the same. They depend on the scope of the project, such as whether you choose to move the plumbing lines to accommodate a new location for a shower or toilet, or whether you choose to keep it simple and just change the vanity and floor.
What can go wrong:
“For a complete renovation, you will need to consider flooring, cabinetry, shower/tub, lighting, plumbing, electrical, ventilation and labor,” said Sallie McBrien from Your At Home Team in Alexandria, Virginia. “Your budget for each item will generally depend on the materials you choose and the quality of the workmanship. Bathrooms have a lot of variables (like water) and working systems inside. Those These can lead to much more unforeseen problems than, say, a closet. For a bathroom remodel or renovation, a 20% contingency is strongly advised. There are just more things that can go wrong.
Roofing costs
HomeAdvisor estimates the cost of a new roof to be between $5,605 and $11,772 — an average of $8,627 — and cost factors include the location of your property as well as the materials used. And like many things in 2022, material prices are rising.
What can go wrong:
Ben Walls of Turnkey Property USA, a real estate investment firm in Kansas City, said roofers can deal with the unexpected. He shared details of a recent project, which had an offer of $15,000.
“At the time it was done, the actual cost was $18,900,” he said. “The bid was for three torn layers of roof, but the actual roof had five layers in many places. We expected to be able to use machinery to lift the shingles up to the three-story roof. However, due to the location of the building, everything had to be manually lifted. Those two little things caused a cost overrun of $3,900, or 26% more than the original budget.”
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