Bud­get Ba$ics

The Prince George Citizen - The Citizen - Real Estate Weekly - - Real Estate Weekly - BY RACHEL STARK

You’ve de­vel­oped a wish list for your ideal kitchen, bath­room or mas­ter bed­room.You’ve gleaned in­spi­ra­tion from mag­a­zines, the web and cable TV, form­ing a vi­sion com­plete with your dream cab­i­nets and fa­vorite floor­ing. But be­fore you get car­ried away, it’s es­sen­tial to tackle the more daunt­ing task of bud­get­ing. Cre­ate a thor­ough, re­al­is­tic re­mod­el­ing bud­get from the start so you and your bank ac­count can be happy long af­ter the paint dries.

“I think so many peo­ple put the cart in front of the horse and hire some­one to de­sign their dream space, then get the num­ber and try to fig­ure out how they’re go­ing to af­ford it,” says Rick Bartelt, owner of Bartelt: The Re­mod­el­ing Re­source, De­lafield, Wis. “That’s re­ally back­ward.”

How much should I spend?

The prospect of a re­mod­eled dream home is ex­cit­ing – all the more rea­son to care­fully plan a bud­get and get the re­sults you want

Be­fore re­mod­el­ing, home­own­ers should de­ter­mine how much they’re will­ing to in­crease their monthly ex­penses, Bartelt sug­gests.

They also should be mind­ful of why they’re re­mod­el­ing. For in­stance, is it for an ex­pand­ing fam­ily? For per­sonal en­joy­ment? To in­crease the home’s value? This will help de­ter­mine the amount of money that is wise to in­vest in the home.

If the home­own­ers are plan­ning to move in a few years, it is es­pe­cially im­por­tant they con­sider the value of other homes in their neigh­bor­hood and stay within rea­son­able stan­dards.

If you plan to spend more than $50,000 to re­model, “you bet­ter plan on be­ing there for 10 to 15 years to get that re­turn on in­vest­ment fi­nan­cially,” Bartelt says.“As for the en­joy­ment fac­tor, they might see the pay­back in one year.”

How much will it cost?

To get a re­al­is­tic idea of the po­ten­tial price of a project, a lit­tle re­search can go a long way. One use­ful re­source is the an­nual Cost Ver­sus Value Re­port, a chart is­sued by Re­mod­el­ing Mag­a­zine, which is widely used in the in­dus­try.

The re­port pro­vides data on the av­er­age cost of pop­u­lar re­mod­el­ing projects and the value they re­coup upon re­sale in all re­gions of the coun­try. It also is­sues na­tional av­er­ages – the typ­i­cal midrange kitchen re­model in 2013, for ex­am­ple, costs just less than $54,000, with 69 per­cent of that re­tained at re­sale.

No mat­ter how hard home­own­ers try to set and stick to a bud­get, un­fore­seen prob­lems or op­por­tu­ni­ties of­ten arise in the re­mod­el­ing process. That’s why many pro­fes­sion­als sug­gest peo­ple des­ig­nate 10 per­cent of their bud­get as con­tin­gency money.

“I think the cush­ion is two-part,” says Josh Fi­ester, a project de­vel­op­ment man­ager at Mel­ton De­sign Build in Boul­der, Colo.“Five per­cent should be for prob­lems that come up, like when you open a wall and find rot­ted lum­ber. The other 5 per­cent should be for op­por­tu­ni­ties that arise, like, ‘We should put a win­dow here.’ This is a cre­ative process.”

How do I stick to the bud­get?

A re­mod­el­ing com­pany that is thor­ough and up front at the start will en­sure you have min­i­mal un­ex­pected cost in­creases.“You want to have some­one whose goal is to make sure you’re happy at the end, not give you a cheaper price up front to get you ex­cited,” Fi­ester says.

When choos­ing the re­mod­el­ers, re­mem­ber that good work comes at a cost, Fi­ester adds:“You don’t get to have the fastest, the best qual­ity and the cheap­est.”

And with the pro­lif­er­a­tion of dis­count deals on sites like Groupon and Liv­ingSo­cial, it’s eas­ier than ever to be tempted by low prices.

“As a con­sumer, you have to read the fine print,” says Ja­son Get­tum, vice pres­i­dent of Get­tum As­so­ci­ates, a re­mod­el­ing com­pany in the In­di­anapo­lis area.“If they say you can get a $5,000 bath­room for $2,500, it of­ten means one of two things: Ei­ther the con­trac­tor is go­ing to go out of busi­ness re­ally soon or you’re not go­ing to get ev­ery­thing you want.”

Get­tum sug­gests read­ing re­views of the com­pany, chat­ting with past clients and check­ing if it is a mem­ber of a lo­cal builders as­so­ci­a­tion.

While you may be look­ing to cre­ate your dream home, be care­ful when set­ting your ex­pec­ta­tions.“Peo­ple with re­ally low bud­gets see th­ese TV shows where peo­ple get lovely re­mod­els done in two days,” he says.“It just doesn’t hap­pen that way.”

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.