A question that always comes with its share of dilemma for prospective home renovators is that how much should they be prepared to spend for their home renovation? Repairs is one thing and renovation, without a speck of doubt, quite another. To put the question again- what budget can be called appropriate and at what level the fear of overcapitalizing comes into the picture?
Is there a tried and tested rule for defining renovation cost?
There are certain tried and tested rules. For instance, designers plying their trade all across the globe will tell you that the amount forked out for kitchen renovation should not exceed 10% of total home value. All good with the theory! If the value of your home is $400,000, you should not look beyond spending $40,000 on your kitchen.
Such “expert angles” give you a fair estimate of costs that you can incur while renovating different areas of your home. However, the crux question still remains. What should we be ready to pay in terms of total renovation cost and at what level should we think along the lines of relocation instead of renovation?
And here is what you need to be warned against
There is no precise figure and add to this a caveat: what you choose as your home renovation or extension budget will never be equal to the final amount you pay. Always be prepared for a 10% to 20% cost escalation. Haven’t we heard that theory and practice are two different things?
Professional help can come in handy
Professionals can help you immensely while calculating a handy renovation figure. A building inspector can undertake a comprehensive survey of your home; an examination after which he is likely to be able to tell you if you require structural renovations or purely cosmetic ones. Such assessments can help you zero down on the cost.
Architects do not come cheap. They have an asking price but they are seasoned enough to give you a renovation plan and tell you just what may be the hindrances in the way ahead. As an aside, they are likely to tell you how much will the whole project cost.
Decent profit during resale
When you get to know about the renovation budget, add it to the price of your home purchase and figure out whether the price still leaves room for earning a decent profit during resale. For this, you will have to dig into the comparable sales figure of your locality. Sometimes, if the capital growth of your locality is astonishing, it may be advisable to hold on to the property for a while after getting it renovated. For all you know, you may have more money shipping itself into your hip pocket.