Here’s a common scenario: John Q. Homeowner has carefully planned a renovation for his home. He has received an estimate from a remodeling contractor, and wants to make every dollar count. Even if the cost is higher than he would’ve liked, he wants it to be predictable.
What he planned for is what he wants to pay. His project is, after all, a big investment.
Unfortunately, things don’t go as planned. The final cost of the renovation ends up far North of what John expected—but since the work is already in later stages, he has little choice but to ante up and move forward.
This scenario is all too common in home renovation. When all is said and done, the homeowner ends up paying more than expected.
Why does this happen? Sometimes the remodeling contractor is less than honest about costs. They want to win the job, so they come in with a lower bid, knowing that the budget will probably be exceeded. This can be avoided by seeking a reputable contractor and demonstrating personal involvement in the project.
But costs can also soar because of certain oversights on John’s part—or things he simply didn’t realize when he started. If John had known about the five hidden costs of home renovation, he could have saved money and finished on budget.
- Building Permits & Code Violations
- Going in, John didn’t realize that the cost of permits for his project would not be a fixed amount, but rather a percentage of the total renovation cost. This depends on where you live, but is often the case. He also failed to do his own research and work with the remodeling contractor to make sure the project was completely in line with local building codes. When code violations were pointed out after the work had begun, John’s wallet took a hit.
- Family Logistics
- Because the project included substantial renovations to the kitchen, John’s family could not prepare their own meals for over three weeks. This resulted in more dining out, and added significantly to the overall cost of the project. He did not think of this ahead of time. His child also reacted badly to the loud noises and presence of strangers in the house, which resulted in the need for daycare on several occasions. John did not consider how the renovation would disrupt his family’s daily routine or his bottom line.
- Nasty Surprises
- Because John’s house was built prior to 1975, there was increased risk of mold and asbestos.
He was hoping for the best, but asbestos was discovered once the project got underway. As a result, John had no choice but to delay the project and hire a professional to remove it. This costed thousands. If he would have brought in that same professional at the beginning, and asked them to perform a check for mold and asbestos, he would have known what he was getting into.
- Unclear Contracts
- Because he was busy at work while planning the renovation, John did not pay close attention to the contract between himself and the remodeling contractor. There are a number of materials and supplies that were not included in the contract, and for which John was contractually responsible. Not only did this create tension, it caused his costs to soar even higher. Being crystal clear with the contractor about the cost of supplies and materials could have easily prevented this.
- The project was finally completed, and although John has paid far more than anticipated, the results are excellent. But what’s this? The City charged $70 to have that dumpster parked on the street, and required a “rider” on his home insurance policy to cover possible injuries related to the dumpster. Plus, the kitchen area and several carpets needed professional cleaning once the remodeling contractor left. This laid one final hit on John’s wallet. If only he had taken some time to educate himself on common mistakes in home renovation, his costs—not to mention his stress levels—would have been a lot lower!
- The Bottom Line
- It’s impossible to think of everything, especially with a big renovation project. There will always be a curveball or two, but giving the details some extra thought will ultimately keep your costs down.
What do you think? We’d love to see your questions and comments.