The Costs to Renovate a Home
Renovation and remodeling are popular ways to improve the appearance and function of homes, but they can be expensive as well. In fact, the costs to renovate a home may be more expensive than you might think, even if the change is relatively minor. It pays to do the research and find out all the costs that are associated with renovating your home before you begin.
How Much It Will Cost
Before you start, be sure to calculate to the final digit the cost of the renovation project you have in mind. This will mean considering at least five different factors associated with the renovation, so be sure to include the following;
- Purchase
- Rehab
- Ownership
- Sale Price
- Labor
Purchase
This is where you will spend the most amount of money, especially if you are closing on the property itself. Some of this will flow over into your labor costs, but there are certain things to keep in mind such as the following;
- Inspection
- Appraisal
- Purchase
- Surveys
- Fees for Lenders and Attorneys
Rehab
Here, you will consider the costs of permits, fees from contractors, and any work that needs to be done on the property. You will need to work close with the contractor so that both of you are on the same page in terms of what needs to get done. A home inspector helps here as well along with a person experienced in flipping homes if you plan to sell quickly. The more advice you can get, the better off you will be.
Owning
If you plan to hang on to the home for a while, you’ll need to consider the costs associated with ownership that includes paying on the mortgage, taxes, property insurance, utilities, and keeping up the yard. Also, if the home is near a flood zone, consider flood insurance as added protection.
Selling
If you do the job right, then selling should provide you with a tidy profit for your investment. However, there are costs associated with selling even if you get rid of the home quickly. They include the following;
- Commission for Real Estate Agent
- Price of Sale
- Warranty on Home
- Tests for Radon and Lead
- Attorneys
- Staging the Home
- Pest Inspection and More
Even if you’ve done your homework, there are still costs in selling the home quickly. Be sure to take these costs into account when thinking about renovation.
Labor
Labor includes the costs of the professionals needed before you begin. You’ll need to get this step right so that everything else falls into place. The people that are going to be associated with your project will include the contractor, home inspector, real estate and insurance agent, lenders, and attorneys. Be sure that everyone you contact is the best in their field and have a sterling reputation.
When you consider the costs to renovate a home, keep in mind that it should match your goals. For example, if your renovation project is designed to improve the sale value of the property, the costs should not exceed the projected bump in price.