Top Reasons Why Home Renovation Costs Can Go Overboard

Home renovation costs are generally high and homeowners need to carefully plan the remodeling project. Before commencing the project it is important for owners to list down their requirements and the budget allocated for the renovation.

Here are some reasons why home renovation costs can get higher than originally planned by the owners.

• Equipment cost - There are many reasons why labor saving equipment is not easily available. This makes it necessary to use manually operated equipment, which is time consuming and costly. Therefore, the total cost increases.

• Excavation - Excavating equipment availability is limited. Moreover, the excavated materials need to be transported over long distances. These factors combine to increase the home renovation costs.

• Load bearing structural modifications - Remodeling a home involves making structural modifications to the home's interior and exterior walls. These modifications may result in a change in the home's load bearing capacity. Additional expense will therefore have to be incurred to compensate these changes. This increases the total costs.

• Material and labor in small quantities - Home renovations generally use the method of procuring materials only as they are needed. Therefore, owners cannot benefit from the economies of scale and hence the home renovation costs increase.

• Adherence to deadlines - Mostly, the renovation isn't able to adhere to the pre-determined timeline. While the work is being undertaken, homeowners may find unexpected circumstances along the way. This leads to time and cost overruns, thereby increasing the total costs.

• Modifications to plumbing, HVAC and duct systems - These can be expensive. One of the reasons that the costs increase is because the original items may no longer be available and owners have to opt for more expensive replacements.

• Protecting the existing and neighboring structures - This involves constructing adequate safety mechanisms. These mechanisms require money that increases the total home renovation costs.

• Contractor charges - The amounts are generally charged irrespective of the total time taken to complete smaller projects. Thus this also increases the costs.

Though all the above factors are instrumental in the increase in the total home renovation costs, homeowners should get an estimate before embarking on the remodeling project. Costs are a simple function of materials, labor and time. Procuring more than one estimate will assist homeowners understand the average cost of the renovating the homes.

For most homeowners the wish list of needs and requirements will exceed the available funds. Because the renovation cost is highly variable, preparing a budget is critical. An accepted norm for the cost is to invest between 20% and 30% of the home's market value.

Renovation is generally done to some common areas, such as the kitchen, bathrooms, adding an extra bedroom or extending the homes. These are expensive alternatives.

Homeowners should consider the incremental value that these remodeling projects will bring to the homes to maximize their returns. Home renovation costs are a factor of numerous variables. Homeowners should keep in mind that irrespective of the time spent on creating a budget, the costs will definitely increase by 10% to 15% from the estimated amount.