A major home renovation can dramatically increase the amount of enjoyment you get out of your home: A new deck, pool, or patio can create enjoyable new spaces to entertain. A kitchen renovation can turn a functional space into a family gathering place. A master suite addition can create a private sanctuary.
Still, busting the budget is the number one challenge home remodelers face. Even a smaller-scale project like a new wood deck can easily run $10,000 or more. Upgrade to composite material and you could quadruple your cost. Seemingly small construction decisions can have a big impact on your wallet, and those charges can quickly add up. The good news is that there are steps you can take — before you start building — to keep more of those pennies from leaving your pocket.
1. Plan your big picture.
The more decisions you make up front, during the design phase, the smoother the project will run — and the lower your overall cost will likely be.
“It’s usually the extras for doing work that was unexpected and that comes up during the actual construction that causes cost overruns,” says architect William J. Hirsch, Jr. To avoid these overruns, Hirsch suggests drawing up a detailed plan, either on your own or by hiring an architect, before you start any construction or demolition.
To DIY your plans, Hirsch suggests using either graph paper or an online software program. Highly rated programs include Virtual Architect Ultimate and TurboFloorPlan Home & Landscape Pro. “The ultimate goal is to document and communicate as much as the homeowner can about the renovation,” says Hirsch.
“If something is shown on the plans or in the notes, the builder will be obligated to provide it,” says Hirsch. “If it is not on the plans, the homeowner will have no guarantee it is included in the builder’s price and contract.” Those written specifications are what a builder will use to spec out a job, create a quote, and determine what work ultimately gets done.
The more you can specify up front, the better off you’ll be financially. To avoid surprises, get as detailed as you can during the planning phase. For example, when planning a kitchen remodel, include the appliances, sinks, faucets, countertops, base cabinets, upper cabinets, light fixtures, garbage disposal, fume hood, backsplash tile … The more detail you can include up front, the fewer surprises and unexpected expenses you’re likely to face as the project progresses.
What may seem like small choices can come with big consequences for your contractor. The shower faucet choice, for example, will affect which valve needs to go in the wall. The type of flooring will affect the type of sub floor. These details aren’t intuitive for many homeowners, but a quick internet search can yield a detailed checklist for just about any project.
“I’ve done 3,500 jobs and I can only remember twice that someone picked everything out before we started,” says Danny Lipford, home improvement expert and host of Today’s Homeowner television and radio shows. He also owns Mobile, Alabama-based remodeling company Lipford Construction. While getting overly specific isn’t necessary during the planning phase, waiting to make those choices at the last minute means you can’t shop for sales and might be limited to in-stock inventory, which may cause putting the project on hold while you wait for product delivery.
“Some things may take three to four weeks to be delivered, but your contractor could be ready for you in a week. Any scheduling that works against you will end up costing you money,” Lipford adds, because the contractor will have to wait to proceed.
2. Hire the right help.
Gathering quotes is important, but not just so you can review each contractor’s bottom line bid. That’s just one small part of the overall equation. Upfront conversations can help you understand questions that are important to ask other contractors, what services are included with which bids, and what type of expertise a specific contractor brings to the project.
In fact, the contractor with the lowest bid may be the one to avoid. An unrealistically low offer could be a warning sign of sub-par construction quality or inferior building materials. It could also mean that they haven’t fully accounted for all the costs associated with your project, which could lead to unexpected financial surprises as the renovation unfolds.
A quality bid will be one with line items that account for even the most minute of details; for example, which roofing shingles will be used, what size window frames have been selected, which valves and faucets will be installed. If specific materials are not explicitly spelled out in the bid, the contractor could buy materials that are lower quality than you’d ultimately want.
There isn’t a standard requirement for what’s included in a contractor’s bid, so it’s up to the homeowner to compare contracts to make sure they’re accounting for the same project details. If you like a contractor but his bid includes less detail, ask him what materials and fixtures he plans to use, and then have that information built into his bid. The more information that’s included up front, the less likely you are to be hit by surprises later on.
It’s also important to hire a contractor who regularly does the work you’re hiring them to do. “If they do big commercial projects, you don’t want them in your house,” says Lipford. Likewise, if your project is mid-range, don’t hire an upscale renovator. You want the person who’s intimately familiar with the type of work you want done, so they’re familiar with the needs of customers like you, who live in homes like yours.
3. Do some of the work yourself.
Even if you’ve hired a general contractor to manage the overall project, you may be able to cut costs by doing some of the unskilled labor yourself. For example, a homeowner can agree to prep the project before a team of contractors arrives on site. That could include removing furniture, tearing up old linoleum, and demolishing non-load-bearing walls. “Right there you’ve saved a bunch of money and you’ve used almost no skill. You’ve just used labor,” says Lipford.
You can make similar moves on the back end. You may decide to paint the space yourself, buy your own finishes, or hire a separate plumber to come in and install fixtures. Set your project up this way and “the contractor realizes he can roll in in a few days and be done. You’ve saved him a dozen phone calls and a dozen selection issues. The homeowner has done all the grunt work,” says Lipford, which means the contractor doesn’t have to lean on his expensive skilled laborers to do work that requires a much lower skill level. He can send them on to his next job, instead. “You can easily save 30% by doing the non-skilled labor yourself,” he added.
Tara Saxton, president of KTM Exteriors & Recycling, agrees. “It’s not something you need to be licensed to do, so, with a little bit of muscle and a few trips to the dump, you can save some money,” she says. Still, she warns, have a professional test your property for damaging materials like lead paint or asbestos before you tear down your own walls or exterior, particularly if you own an older home. If your home tests positive, save the demolition work for the experts who know how to minimize and clean the resulting dust, which can be harmful to your health.
4. Avoid changing your home’s layout.
“When you start moving plumbing and electrical, your renovation costs will increase significantly,” says Saxton. “If you’re over budget or are satisfied with the current layout of your home, keeping it the same will keep the renovation costs lower.”
If you hire a draftsman to draw your renovation plans, he should know to balance your desire to move plumbing fixtures or air conditioning duct work with the costs associated with those changes. “Many architects will move a wall a foot” if they’re asked to, says Lipford, but they may not consider that the $2,500 cost may be a budget buster for the homeowner. Still, it’s up to the homeowner to have upfront conversations with the contractor about how changes will affect the project’s bottom line.
Even so, there are times when those added costs make sense. If skipping the work “represents a significant compromise in the overall result of the project, you have to weigh that carefully,” says Lipford. It might cost more to move a pipe, yet skipping it could also diminish the quality of the end result.
5. Decide where to splurge … and where to skimp.
A high-end renovation can break the bank, but that doesn’t mean you can’t strategically create the illusion of a more expensive upgrade. Lipford recommends splurging on features that are permanently installed — bathtubs, cabinets, and windows, for example. Another philosophy is to save high-end finishes for high-traffic areas of the home, like the entry, kitchen, and dining room. These are the areas where homeowners and guests spend the most time, which means details are more likely to be noticed and enjoyed.
Still, for most home renovation materials, it’s a safe bet to buy those that fall between the highest and lowest priced options: the mid-range price points. In general, that range will ensure “you’ll have something that won’t cause you problems but that will also last a long time,” says Lipford. “There’s not a lot of return on investment for higher-end products because no one else will realize you spent $10,000 more” for the superior product.
Still, where you are looking to cut costs, Lipford suggests less expensive options in areas where it’s easier to remove and replace. For example, “countertops are easy to pop off and put back on,” Lipford says. “If you can’t afford granite, put in the laminate. Then, upgrade it when you can.”
6. Check your insurance coverage.
Many general contractors carry a general liability policy with a $1 million limit but, if someone is injured on your property, that coverage may not be enough. Your insurance professional can help you decide if you need a temporary umbrella policy or additional homeowners coverage for the duration of the project.
In short, a little upfront planning can go a long way toward preventing expensive surprises. The more time you spend planning before you start the project, and the more you’re willing to do yourself, the lower your overall costs are likely to be.
Thank you for giving us a direct and straight to the point answer! It greatly helped in clearing our confusion.
Keep up the great work! Thank you so much for sharing a great posts.
Thanks for pointing out that we should hire contractors who do the work regularly. As you said, it will assure you that they will be able to do the project you need from them. I will suggest this to my partner so that we know what to hire. We just need the house to be restored after it was affected by the overflowing of the river when the hurricane struck our area weeks ago.
Thank you for your feedback Millie.
Thanks for the heads up on opting to spend more on permanent fixtures in order to create the illusion of a high-end renovation while spending not as much for it. Speaking of permanent fixtures, what tips can you give me when repairing one’s drywall? Is it better to ask an expert about choosing expensive or cheap materials for it?
I find it interesting that you mentioned that one should draw a detailed plan in order to anticipate unexpected work and avoid cost overruns. For a home reconstruction project, how should one choose a door that leads to the garden from the kitchen? Should it provide ample security to either place in the house? What material would be the cheapest and most appropriate to use for it?