Thinking about taking on a home renovation project? Congratulations. Investing in home improvement is always a good choice. Before you start shopping for fixtures, flooring and furniture, you’re going to need to nail down a realistic home renovation budget.
A home renovation budget is the best way to keep your project on track, no matter the size. It helps ensure that everything goes smoothly and that you don’t overspend. For it to work, you’ll want to account for everything, right down to the smallest details, and then put some extra money aside on top of that to cover unforeseen expenses.
Ready to get started? There are four essential steps to take when planning your renovation budget. Here is a look at what they are, and how they can help your next home improvement project go from “something to think about” to “stylish success”.
Communication is without a doubt the most important part of creating your home renovation budget. You’ll need to gather all interested parties, whether it’s a spouse, relative or investment partner and really talk about your expectations for the project. It’s important to come to an understanding about how much you want to spend and where you want to spend it. Not discussing this upfront can lead to arguments, overspending and abandoned projects down the line.
Gaining a genuine understanding of how much home renovations cost is essential to the creation of your budget and your project’s overall success. To do so, you’ll need to request quotes (and references while you’re at it) from contractors, and shop around to see how much all of the components of your project actually cost. This will give you the numbers you need to plug into your budgeting spreadsheet or app.
NOTE: Don’t assume that what you see on reality home reno shows is an accurate reflection of how much most home renovations cost. Those budgets are often far lower than what they would be in real life.
Now that you’ve opened the lines of communication and researched how much your project will likely cost, it’s time to start figuring out where your priorities lie. Are you more interested in function or flair? Are granite countertops a high priority for your kitchen renovation or would you be satisfied with a lower cost alternative?
As you work out the things that matter most throughout this renovation, you may come to find that you and your renovation partner might not have the same opinion on a few things. It might be tough, but compromise and give and take are all part of the renovation process. Better to get these differences worked out now than when you’re in the middle of the project.
For smaller projects, securing financing might just be a matter of turning to your bank account or a credit card. However, for more substantial projects like a kitchen renovation or finishing a basement, you may need to look to alternatives.
For example, many Canadian banks have fantastic products for homeowners planning to spend a high amount (typically over $10,000) on home renovation projects, which offer cost-effective means of financing your medium size renovations, and also home equity plans, which may allow you to borrow up to 80% of your home’s equity.
These products make it possible for you to make valuable presale upgrades, to accommodate the arrival of a new family, or to simply improve on the style and function of your home.
If you’re ready to learn more about investing in your next home renovation, make an appointment to speak with a financial adviser at your chosen bank.
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