Home renovation

Why You Might Want To Delay This Home Renovation Project

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Low housing inventories and rising demand for housing aren’t just affecting housing prices – they’re also affecting demand and construction prices.

Currently, home inventories are low and home prices are on the rise. Entrepreneurs and developers are trying to keep up with demand. They struggle to find enough tradespeople to cover all the projects they take on.

Tradespeople and contractors are busy building new homes, but they are also busy with renovation projects.

As home values ​​rise, homeowners initiate more renovation projects. The owners feel richer. They feel more comfortable paying for this major home improvement and, as an added incentive, the equity in their property can be used to cover the costs. This increases the demand for contractor services.

It may be exactly the wrong time to do this renovation project. The cost of construction is rising everywhere. Labor and material costs are rising and contractors are making bigger margins.

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Someone recently shared with me an estimate he got from one of the big home improvement stores. They just wanted their tub and one-piece tub surround replaced. It was a one day job. I did some research and learned that the material costs were under $2000. Two tradesmen for eight hours at $50 an hour is $800, but their bid for the job was $6,000.

I told these people to cancel this work and call local contractors directly, but it was too late. They had signed a contract and they would have had to pay 50% of the value of the contract to cancel it. This was unfortunate, since it was an elderly couple on a fixed income. The few thousand dollars they could have saved would have been huge for them.

I recently spoke to a tile contractor who works for another big-box home improvement store. He tells me they charge $25 per square foot to lay floor tiles; these are just labor costs. About $12 a square foot was the top price I remember, even in the middle of the last boom. If a tiler can make $25 a square foot, he can easily make more money than most doctors and lawyers.

The prices of materials are also exploding. Hardwood is a perfect example. Last winter, I purchased a basic solid oak floor. It was not for sale. It was the baseline of the business – it’s always in stock and sellers are pushing it. By the summer of last year, the price of the same hardwood floor had gone up 30% – and it stayed there.

Soaring prices alone are bad for the consumer. To make matters worse, the quality of work often declines when contractors are busy. Essentially, you’re paying more for less.

I have noticed that in my projects, the work takes much longer to complete and that the building inspectors find much more serious deficiencies in the work.

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It’s not the first time I’ve seen this show. This same problem was close to epidemic during the last housing boom. Contractors named their price and terms. Consumers took what they could get. They didn’t have much influence since it was much easier for the contractor to find another job than for the client to find another contractor. We are still feeling the effects of shoddy craftsmanship from the previous housing boom.

Over the past decade I have seen a lot of bad construction going back to the last building boom. I’ve gone through a lot of half-finished projects that would need a lot of reworking to complete. I have heard many horror stories from the owners.

Remodeler magazine recently published an article “Boom Town Falling Down”. The article highlights how the construction and real estate boom has led to a significant increase in structural deficiencies.

Rising demand, profit margins and labor rates are not going unnoticed. These are the times when the less reputable or at least the less qualified enter (or re-enter) the market. This abundance of work and inflated rates are causing people to quit what they are doing now and fasten a tool belt.

It’s not just in contracting, by the way. The scammers and the less experienced are coming out to get a piece of the action as real estate investors, real estate agents and other housing-related professions. I wish all well-meaning entrepreneurs the best, but I beg the consumer to be careful at times like these.

If you’re considering a major renovation project, you might really consider waiting. The market will turn – it’s just hard to say when. The downside is that it could take years for that to happen. Eventually, I promise you, entrepreneurs will once again be grateful for the work, and the market will once again exercise its powers of natural selection to weed out some of the less reputable and/or less skilled entrepreneurs.

If you can’t wait to renovate, please get multiple offers, many multiple offers. Check references, lots of them. Make sure references are recent and check their reviews online.

I just had an asphalt contractor on one of my projects. I didn’t hire him. My general contractor did. The contractor was to extend the driveway and seal the existing portion of the driveway. When they showed up to do the job, they told us the cost was $700 more than they had originally quoted. They said we got the price wrong, but I don’t know how. It was a week before closing so we had to eat it. The driveway ended up being three feet shorter than we agreed, and they didn’t remove the excess dirt they dug for the new driveway. They didn’t even pull the weeds or clean the existing driveway before applying the sealer. There were weeds growing through the crack in the driveway. The coat of sealer was so thin it didn’t even kill the weeds; I think they grew better, actually.

My general contractor called the asphalt contractor and asked him to come back and seal the driveway. He shouted, “I’m not your landscaper; make your own driveways from now on. My general contractor says he had given the guy a lot of work in the past; clearly he doesn’t need it. I checked out his reviews online, and sure enough, they were awful. The guy has more work than he can handle right now.

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If you can’t wait to renovate, it might be time to consider doing some work yourself. I normally advise people to be very careful when agreeing to work on their own. It’s not as easy as it sounds, and most people underestimate the financial, physical, and emotional costs of home improvement projects. However, everything is a cost versus gain proposition.

Losing a few weekends might not be worth a few hundred or even a few thousand dollars, but is saving $10,000 worth it? Only you can decide what a weekend is worth to you. A few years ago, it was easy to get a basic bathroom remodel for $5,000. Now contractors don’t even hesitate to bid $15,000 for that same job. It’s not exaggerated.

Most homeowners could undertake a basic bathroom renovation with a little research. You can always hire a plumber just to install the tub and hook up the vanity plumbing if you’re not comfortable with that.

If you choose to take on a project yourself, the handyman has more resources than ever before. Take a look at the free explainer videos posted online. Be a little careful. Some of these YouTubers may not be professionals in their field. If you need more reliable sources or more in-depth instructions, try trade magazines and associations that offer instructional videos.

On a positive note, I don’t think there’s anything better for the soul than doing your own home improvement project. Granted, it doesn’t get much harder on your soul while the project is underway.

Justin Pierce is a real estate investor and real estate agent who writes regularly about his experiences buying, remodeling, and selling homes in the Washington area.