Blog

Reality Check Your Remodel

Budgeting for your home doesn’t have to be a nightmare if you know what to budget for…

Like I’ve said before, home improvement shows on HGTV and other lifestyle channels aren’t really giving you the “reality” of what it takes to remodel.

So if you want to know the real cost of remodeling, throw those home makeover TV show budgets out the window.

Those budgets pale in comparison to what you really need to achieve remodeling success. They don’t factor in the hard and soft costs of remodeling. Plus, they most likely get materials and labor donated in exchange for major TV network exposure.  

Since you’re not a major TV network, nobody is going to give you any breaks.

So, what’s a homeowner to do?  Research the real cost of remodeling before getting started with the planning of your project. One of your first stops on your research journey should be CostVsValue.com. It’s a great benchmark for reality checking your proposed budget.

While this report contains detailed descriptions of common remodeling projects and their construction costs in major U.S. housing markets, it only considers hard costs (i.e. plumbing, framing, finish materials, etc.). Soft costs are out of the loop.

What are soft costs?

These are intangible costs involved in your project. They include but are not limited to professional fees like architectural and engineering fees, permitting, etc..

CostVsValue.com, and another great budgeting go-to, Houzz.com Real Cost Finder, also do not factor in an important aspect of your budget: a contingency reserve to cover unexpected costs such as termite damage or a water leak.

If you take a look at the reports on these sites, don’t forget to budget for those soft costs by using the 20-29% rule: for every $10,000 in hard remodeling costs, budget $2,000 to $2,900 in soft remodeling costs.

Architect/Designer – 10% to 15%

Consultants – 6% to 8%

• Structural
• Surveyor
• Soils
• Geo-Technical
• HVAC
• Energy

Permits/Entitlements – 4% to 6%

• Planning / Zoning
• Building & Safety
• Public Works
• Other

Not every remodeling project requires all of these costs. However, the more bells and whistles you want, the more likely you’ll need to consider them.

As far as the contingency reserve mentioned earlier, set aside an additional 10-15% to cover remodeling surprises (y’know, the ones in the remodeling shows that somehow get resolved duringa commercial break).

It’s always fun to get ideas about your remodel from those home remodeling shows, but to get the real idea about the costs, avoid those shows like the plague. Instead, do a little research on your own and determine a real budget that works for you.