Renovating a house can be a costly but rewarding endeavor, providing an opportunity to transform an old and outdated space into a modern and comfortable living area. However, with many factors involved, such as the type of room, materials used, and the extent of the project, the cost can quickly add up.
For multifamily property owners, renovating can be an even greater expense. Fortunately, there are ways to save money on multifamily renovations without compromising quality.
In this article, we will discuss the average cost of renovating a house and offer tips on how to minimize expenses for multifamily renovations.
What is the Average Cost of House Renovation?
The cost of renovating a house varies depending on several factors such as the type of room being renovated, your location, and your level of DIY expertise. Generally, the project can cost anywhere from $10 to $60 per square foot, and some high-end projects can cost up to $150 per square foot.
To put this into perspective, if you have a 1,000-square-foot home, the renovation cost could range from $10,000 to $60,000, while a 2,000-square-foot home may cost between $20,000 and $120,000. This underscores the importance of planning ahead.
It's important to note that the cost of a home renovation is influenced by various factors, such as the size of the room, the type of work required, the cost of materials, and the overall scale of the project. For instance, if you plan to turn your basement into a bowling alley or install a rooftop Jacuzzi (no judgment), the cost of the project could be significantly different from the average.
To renovate your kitchen, bathroom, and basement, you can expect to spend between $30,000 and $81,000. However, if your bathroom is the most pressing area, it might be wise to focus on that project and put the others on hold.
The most effective approach to setting a home renovation budget is to itemize the projects you plan to undertake and determine their costs. Request quotations for each specific project, prioritize them based on urgency and establish a comprehensive budget for the first project on the list.
How To Decide Your Home Renovation Budget?
When considering a home renovation, it's important to strike a balance between investing in your home and overcapitalization.
Overspending on a renovation project could mean a poor return on investment when you eventually sell your property. To determine how much to spend, it's advisable to assess your current monthly budget.
For example, if your household earns $80,000 and you own a $250,000 home, and you're looking to make $60,000 worth of renovations, such as revamping a few rooms, repairing the roof damage, and evicting squirrels from your attic, you should calculate whether you can afford to save $2,500 a month for the project.
This way, you could complete half of the renovation in the first year of saving.
How to Finance a Home Renovation?
To make wise financial decisions regarding your renovation project, it's advisable to use cash as your primary payment method. While there may be enticing financing options such as home equity loans or lines of credit (HELOC), taking on debt is unwise. It's not worth using your home equity, which is essentially what you own, to pay back a loan with interest for a renovation project.
If you currently have outstanding consumer debt, it is best to prioritize paying it off and establishing an emergency fund of 3-6 months' worth of expenses before beginning any home renovations. Afterward, you can redirect the money you were contributing to your emergency fund toward your renovation savings.
By paying with cash, you'll avoid many headaches, and your home renovation will be a source of joy rather than a burden. You can take control of your monthly spending and save money for your renovation project more quickly by using our free budgeting app, EveryDollar.
Tips to Save Money on Multifamily Renovations
Renovating a multifamily property can be an expensive endeavor, but there are ways to save money without sacrificing the quality of the renovations. By following some simple tips and tricks, you can successfully renovate your property while keeping costs down.
1. Prioritize the Upgrades
When renovating a multifamily property, it is essential to prioritize the upgrades. Focus on the areas that will make the biggest impact on the property's value and livability.
For example, upgrading the kitchens and bathrooms will have a significant impact on the property's value and tenant satisfaction. Focus on these areas first and then move on to other upgrades that are less essential.
2. Opt for Cosmetic Changes
Not all renovations need to be extensive. Opt for cosmetic changes that can give the property a facelift without breaking the bank. Some cosmetic changes to consider include repainting the walls, updating light fixtures, and adding new hardware to cabinets and doors.
These changes are relatively inexpensive but can make a significant impact on the property's overall appearance.
3. Purchase Materials in Bulk
When purchasing materials for your renovations, consider buying in bulk. This can save you money on the cost per unit and reduce the number of trips you need to make to the hardware store. It is also a good idea to negotiate with your suppliers to get the best possible price.
4. Consider Refurbishing Instead of Replacing
Before replacing appliances or other fixtures, consider refurbishing them. Refurbishing is often less expensive than buying new, and the result can be just as good. Refurbishing can also be an eco-friendly option, as it reduces waste and the need to manufacture new products.
5. Do Some of the Work Yourself
While it is important to hire a professional contractor to oversee the renovation project, there are some tasks you can do yourself to save money.
For example, you can do some of the painting or clean-up work yourself. Doing some of the work yourself can save you money on labor costs and give you a sense of pride in the finished product.
6. Use Recycled Materials
Using recycled materials is another eco-friendly and cost-effective option for multifamily renovations. Consider using recycled wood, metal, or other materials in your renovations.
Not only is it a sustainable option, but it can also add a unique and interesting element to the property's design.
7. Keep the Layout the Same
Changing the layout of a multifamily property can be an expensive endeavor. To save money, consider keeping the layout the same and focusing on cosmetic changes instead.
Changing the layout may require additional permits and extensive construction, which can add significant costs to your renovation budget.
8. Hire Local Contractors
When hiring a contractor, it is important to find someone with experience and a good reputation.
However, hiring a contractor from out of town can add significant costs to your renovation budget. Local contractors are often more affordable and can provide the same level of expertise and quality of work as out-of-town contractors.
9. Do Your Research
Research is key to saving money on multifamily renovations. Before starting any renovations, do your research to find the best deals on materials and labor. Shop around and compare prices from different suppliers and contractors to find the best possible deal.
10. Consider a Phased Approach
Finally, consider taking a phased approach to your renovations. Rather than completing all of the renovations at once, consider breaking them up into smaller projects that can be completed over time.
This can help you spread out the costs and make it more manageable for your budget.
5 Home Upgrades That Are Not Worth it
Home upgrades can be an exciting way to improve your living space and increase the value of your home.
However, not all home upgrades are worth the investment. Some upgrades may seem enticing, but they could end up being a waste of time and money. In this article, we will explore five home upgrades that may not be worth it.
1. Swimming Pool
A swimming pool may seem like a luxurious addition to your home, but it comes with a hefty price tag. The installation and maintenance costs of a swimming pool can quickly add up, making it one of the most expensive home upgrades.
Additionally, a swimming pool can reduce your home's value, as some potential buyers may not want the added responsibility and costs associated with owning a pool.
2. High-end Kitchen Appliances
High-end kitchen appliances may look sleek and fancy, but they may not be worth the investment. While high-end appliances may have more features and higher energy efficiency, they are often significantly more expensive than their standard counterparts.
Furthermore, the return on investment for high-end appliances is minimal, making it a questionable investment for many homeowners.
3. Home Automation Systems
Home automation systems, such as smart thermostats and security systems, are becoming increasingly popular. While these systems can improve your home's convenience and security, they may not be worth the investment for everyone.
The installation and maintenance costs of these systems can add up quickly, and not everyone may benefit from their features.
4. Sunroom
A sunroom may seem like a lovely way to enjoy the outdoors without being outside, but it may not be worth the investment. Sunrooms are expensive to install and maintain, and they may not add much value to your home.
Additionally, sunrooms can be challenging to heat and cool, making them uncomfortable in extreme temperatures.
5. Expensive Landscaping
Landscaping can significantly enhance your home's curb appeal, but expensive landscaping upgrades may not be worth it. While lush gardens and elaborate water features may look beautiful, they require a lot of maintenance and can be costly to install.
Additionally, potential buyers may not see the same value in your landscaping upgrades as you do, making it a less-than-ideal investment for resale value.
Read More: How to Renovate a Multifamily Property
Conclusion:
Not all home upgrades are created equal. While some upgrades may seem like a good idea, they could end up being a waste of time and money. Homeowners should carefully consider the costs and potential return on investment before embarking on any home upgrades.
By doing so, they can ensure that their upgrades are worth the investment and will enhance their home's value and functionality.
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