A home renovation can be time-consuming, and you want the result to be worth the hard work. If you make a home-remodel mistake, however, it could turn your dream project into a nightmare.
So how can you avoid costly renovation mistakes? We’ve gathered five tips to help you make sure you’re heading into the right project, the right way:
1. Consider return on investment
Any project is worthwhile if it makes you happy, but if you plan to sell your home soon, make sure you focus on renovation projects that give a good return on your money (see table below of USA examples). Many renovations cost thousands of pesos but won’t increase the value of your home by the same amount.
This table compares average costs for 22 remodeling projects with the value those projects retain at resale.
source: Remodeling Magazine
When it comes to recouping your money, consider how your home compares with others on your street. If you already have the biggest house on the block, and its market value is near the high end in your neighborhood, new improvements probably won’t increase your home’s market value by much.
Consider calling local real estate agents and contractors to ask them about the potential return you might receive from a home renovation project.
2. Create a budget
You don’t want to run out of cash in the middle of a home remodeling project. But unless you’re careful, your project may get more expensive while it’s underway. To avoid running short on cash, add up your expenses before you start the project. Then, add 10% or 20% to the total to allow for cost overruns.
Ask for written estimates from different contractors so you can compare prices and understand the project’s costs. It’s best to have the project fully funded before you start, whether the money comes from your personal savings, a mortgage refinance or a line of credit.
3. Research contractors
As you get estimates from different professionals, check their references and ask about their credentials. At a minimum, make sure each contractor is properly licensed to do the work on your home. A good contractor will guarantee the work and offer a warranty.
When you select a contractor, make sure you get your agreement in writing.
4. Secure home renovation permits
Permits help protect your home and your safety. As per the National Building Code of the Philippines, securing a building permit is required for all renovation projects. The National Building Code of the Philippines defines renovation as any physical change made on buildings and structures to increase the value or quality, and/or to improve the aesthetic. And follow up to make sure your contractor has permits in hand before beginning the work.
5. Understand price/quality trade offs
You’re probably planning to pay thousands or ten thousands of pesos on a remodeling project. It’s understandable to look for ways to save money, but don’t automatically cut corners by using the cheapest materials.
Talk to your contractor about the trade offs between quality and price for your project. You’ll probably be better off selecting the best-quality products that fit your budget. Otherwise, you could be stuck with having to make costly repairs after a few months because you skimped on quality.
A home remodel project can give a big boost to your home’s aesthetics and market value — if you avoid costly mistakes. By setting a budget, researching contractors and making sure your improvements use quality materials, you can help avoid expensive pitfalls and enjoy your home’s new design.
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