Finance tips for your next home remodel

The majority of remodels end up going over-budget. At best, you end up spending more than you thought you would and money is tight for a bit while you play catch up. At worst, you run out of money before the project is completed and can’t pay your contractors. Then you’re stuck living in a construction site while you scramble to come up with some more money to get the job finished. You don’t want this remodeling nightmare to happen to you so here are some finance tips for your next home remodel.

Compile your wish list

Start out thinking about the remodel as if cost wasn’t a factor. Then start thinking about the cost of the various things you’d like to do. From there, narrow down your list to those things that are the biggest priority for you and your lifestyle.

Carefully select your contractor

Don’t hire the first contractor who makes a bid, even if the price is right. Get at least a few estimates and compare them. Don’t automatically go with the lowest. Go with the best value, even it will cost you a little more. Don’t be afraid to haggle prices with the contractor.

Set a budget and stick to it

Never you into a remodel with an open-ended budget. Work with your contractor to determine an accurate and realistic budget for the work you want done. As the project gets underway, don’t start adding on to its scope. Stick with your original plans.

Prepare for contingencies

Never assume that everything will go smoothly because in all likelihood, it won’t. Whatever your budget is, increase it by 10-15% so you have a little extra when the contractor says "uh oh."

Review the contract before signing it

Any reputable contractor will give you a contract in writing before work begins. Don’t just sign on the dotted line. Read over it. Make sure you understand everything and that you are in agreement with it. If there are discrepancies between what you’ve envisioned and what is planned, or if the cost is more than you anticipated, discuss it with the contractor before signing.

Understand how you’ll be paying

Most contractors will take a down payment before getting started and you’ll pay the rest in installments throughout the project. Never pay 100% up front. Find out the payment schedule before work begins and make sure that payments are always tied to milestones in the project, not arbitrary dates regardless of how much the contractor has actually accomplished.

Save all your receipts

Keep track of all your receipts. If you’re the type of person who frequently misplaces things, consider scanning them into a digital document so you can pull them up on your computer. This may be a lifesaver if there’s ever a discrepancy in cost between you and the contractor.

Source: Nola

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