How Smart Homeowners Budget Renovation Costs

Last year in 2021 we saw product shortages for consumers in general, however, none was more problematic than the home building & remodeling supply and material shortages across all areas of renovation and construction.  Budgeting for new construction and renovation projects has become unpredictable, and, many builders and homeowners have sticker shock, and are having to make substitutions to finish their projects.  Builders took to bulk buying for new projects and restricted some choices to new buyers based on their available material supply.

Many Homeowners typically underestimate costs, HomeAdvisor has found when they surveyed over 900 consumers.  Their consumer study found homeowners often underestimated interior paint costs by 50%.  DIY costs will differ proportionally in price from professional costs so, plan on getting multiple estimates to stay on budget.

In early 2021, married clients purchased a new townhome from an independent local builder.  During construction, due to a drywall shortage, the builder substituted a firewall material in place of the typical drywall so as not to hold up the project.  The next portion of the new construction project went up $50,000 in price, per unit, due to the unpredictability of supplies & material.

On the same townhome, a gas insert was ordered as part of the sale, however, a week prior to closing there still was no fireplace delivery, and, the replacement fireplace took 4 months to finalize, as, people were unavailable to install or inspect, due to illness & quarantine, once a Covid diagnosis was made.  While the property closed at the end of August, the fireplace wasn’t completely installed and finally approved until just prior to Christmas.  The homeowners had to install a temporary lockbox on their door since neither of them could be home during weekdays.

When replacing flooring or painting, you will likely fare better.  Just don’t get locked into one color choice, as some supplies may not be available in the quantity necessary to complete a project, forcing you to make a secondary choice, especially with countertops, flooring or tile.  Get professional estimates before you order and make sure you can get sufficient materials in the same color lot so as not to run out prior to finishing the work.  Always get some advice on ordering if you have a running or repeating pattern as well.

The most underestimated costs are landscaping costs, according to their survey.  25% of those surveyed admitted they had underestimated their landscaping costs by 67%.  Landscaping materials can easily add up, as, a single tree can cost between $150-$300, while, the price per tree may decrease if multiple trees are being planted.  Getting professional estimates from the start will help you consider all necessary costs and make realistic choices in your landscape budget.

Another area where, on average, 40% or more homeowners typically underestimate the cost, is window installation.  In Minnesota, where Winters and Summers can really stress your heating and cooling budget, it’s smart to have energy efficient windows.  More homeowners have chosen to upgrade windows in 2021 and, as a result, costs have risen 5-10% because of the higher demand.

In 2020, during a repair job, a window was ordered by a professional installer for a homeowner in mid-August, but, due to delays in product availability, the window wasn’t delivered and installed until November the same year.  Our best advice is to plan way in advance when ordering new windows, get pricing nailed down early, and, anticipate delays in the process just in case.

When setting a budget for any project, homeowners should budget higher than anticipated to avoid cost overruns.  Material prices rose between 5-10% in 2021 for roofing, siding, installation, window installation and more.  It is smart when estimating costs for supplies and installation to add a pad of 5-10% to initial project estimates to offset future price fluctuations.

For first-time homeowners, if you are taking on larger projects, be sure to follow all city and county codes for renovation.  Don’t assume that by watching a DIY series you have seen all potential issues and solutions.  Unwelcome surprises are very common, so, think twice if you are unsure and contact a professional.  It is better to be safe than sorry and really overrun your budget.

Written by Claire Bastien for FindYourMinnesotaHome.com

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