Home Remodeling Primer – Part Three

By administrator On March 25th, 2009

The amount that you’re willing to spend on home remodeling is a function of the actual value of your house. It has a direct influence on your decision to either remodel and stay or sell and move out. Ideally your remodel costs should not exceed 25% – 30% of the cost of your house. This is a general rule of thumb but may vary with neighborhood.

The value of your home can be calculated by taking into consideration the type of your house, construction, age of home, locality, market situation, and growth prospects for the locality. You can also check what homes similar to yours are selling for. This will give you an idea on what you can expect from a sale for a given amount of remodeling done.

If you decide to get your home renovated and apply for remodeling finance then you may have to first take the services of a professional appraiser before you can qualify for the loan. You are best placed to remodel and sell your home if you have 100% equity in it. If there are any mortgage costs that you are paying off then it may become a little difficult to avail loans as this directly impacts your borrowing potential.

The amount that you will have to spend on a remodel will vary with the area you live in, time of the year, and of course extent of remodel. Consider factors such as cost of labor as it can send your remodeling budget soaring.

The type of remodel is of course key. Adding a new wing or a garage is far more expensive than doing a kitchen remodel or an attic remodel. A home expansion is like building from scratch and you have to erect walls, add a roof, siding, insulation, electrical wiring, plumbing, etc. Break up the costs into cost of materials, labor, permit fees, enhancements, repairs made necessary by the remodeling, and cost of cleanup post remodeling.

Once you know that these are the factors to consider then you can evaluate contractors in a more objective manner. A contractor’s bid should include information on the cost of permit fees, labor costs and total hours of work required, any insurance costs, cost of material and equipment, unplanned and incidental costs, cleaning up costs, and if the contractor plans to subcontract then subcontractor fees.

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