The past two years were all about renovating, as homeowners ventured to expand their kitchens, transform extra bedrooms into home offices, create all-in-one entertainment spaces or build outdoor oases to temper their wanderlust. While the initial renovation rush has slowed, homeowners continue to remodel their homes to better suit the lifestyle needs brought about by the pandemic.
From budgeting to financing and handling unforeseen problems, here are the four things homeowners need to know about home renovations and maintenance.
How to budget for a renovation
Properly budgeting for a renovation can be a complicated process, as homeowners must not only consider the cost of materials and labour but the cost of an unforeseen maintenance issue that must be fixed before proceeding with a project.
Home buyers looking to purchase a fixer-upper should create their budget based on a worst-case scenario, where additional materials must be purchased, a preferred countertop or cabinet is out of stock, additional contractors are needed to complete a job, or unknown plumbing, electrical or structural issues must be ironed out.
There is always more to a fixer-upper or renovation than meets the eye. There are cosmetic things like painting, new carpet, countertops, or flooring, but often what lies behind that are maintenance and structural issues that have to be corrected. So create an initial budget and then triple it to make sure you’re well-equipped for any surprises that arise.
Kitchens are the most popular room to remodel, with the average project costing $25,424. However, homeowners can spend as little as $4,000 or as much as $60,000 depending on the size of the kitchen, the number of updates and design fees. Roughly 25 percent of the budget will go toward labour, while cabinetry and hardware ($6,000 or more), appliances ($3,200 or more) and countertops ($2,300 or more) are often the most expensive projects.
Bathrooms, the second most popular remodeling project, cost an average of $10,718, with homeowners spending as little as $3,500 on a small bathroom or more than $25,000 on an ensuite bathroom. Roughly 50 percent of the budget will go toward labour, with vanities ($300 to $3,800), showers ($300 to $3,000), fixtures ($200 to $1,800) and flooring ($200 to $1,350) comprising the lion’s share of the materials cost.
The next favourite, home offices, can cost anywhere between $5,000 and $22,000 based on the addition of built-in desks, bookshelves and cabinets ($1,200 to $3,900), hardware and connectivity ($100 to $3,000) and soundproofing ($1,000 to $2,400). However, unlike kitchens and bathrooms, home office renovations offer tax benefits.
Lastly, outdoor renovations are the hardest to price as they can involve a bevy of additions, including a new pool and pool house, decks, porches, sunrooms, outdoor kitchens and much more. However, HomeAdvisor estimates a full backyard renovation can easily reach the six-figure mark.
Paying for a renovation
After creating a budget, it’s time to figure out the best way to pay for a renovation. According to MarketWatch, homeowners who completed a renovation this year favored using funds from their checking accounts (34 percent) or their credit card accounts (29 percent). Another 25 percent used money from a renovation savings fund, while 8 percent applied for a personal loan.
Homeowners can also use a home equity line of credit (HELOC) to borrow a portion of their available equity to bankroll a renovation. HELOCs are a common option for homeowners — thanks to the lengthy repayment timeline and the opportunity to improve a home’s value without depleting checking or savings. However, HELOCs come with risks that homeowners should consider. The stakes are higher when you use your home as collateral for a loan. Unlike defaulting on a credit card — where the penalties are late fees and lowered credit — defaulting on a home equity loan or HELOC means that you could lose your home. Before you take out a home equity loan, do your homework.
To keep costs in control, most homeowners limit their projects to landscaping, painting, flooring and small kitchen and bathroom updates. But you should also consider making updates to your backyard and home office in response to increased interest in those areas, something that is going to resonate with many more people now than prior to the pandemic.
Mitigating other problems
Along with remodeling usually comes other home maintenance projects such as replacing home insulation, deep cleaning high-traffic rooms, handling pests or ridding the home of persistent pet odors.
Some projects, such as deep cleaning rooms or eliminating pet odors, can be done by the homeowner with the use of common household cleaning items. However, severe problems will need to be handled by professionals.
If that’s the case, homeowners can expect to pay $1,400 for a professional pet odor and stain removal service. The cost will depend on the severity of the issue, which cleaning method is used and whether floor replacement is needed.
However, in severe cases, steam cleaning and odor elimination and remediation may not be enough. In this instance, the flooring will need to be removed, the sub-floor will need to be cleaned, and new flooring installed, which can cost up to $10,000 per room.
In addition to odor removal, homeowners may need to take care of pests, such as insects, rodents and other small animals or wildlife. Homeowners can spend as little as $50 to get the job done, but the average pest removal costs between $350 and $1,000. Heavy-duty jobs that include dangerous wildlife such as snakes, bats, etc. cost more.
Fixr said homeowners have six options to take care of pests, with the first two being a more DIY approach of simply getting rid of what’s attracting the pests (e.g. emptying overfilled trash cans) or buying a pet that will do the job for you (e.g. adopting a cat to rid your home of mice).
The next options include chemical pest control, fumigation or a heat treatment that “superheats” your home to get rid of stubborn pests like termites and bed bugs. Chemical pest control is the cheapest option at $250 to $1,000 per room, while fumigation and heat treatments cost an average of $4,000.
Lastly, homeowners can choose eco-friendly or humane pest remediation options. Eco-friendly pest removal uses products that aren’t harmful to people or the environment. The cost of humane pest removal varies depending on the severity of the problem.
What’s the return on investment?
Here’s the million-dollar question: How much value will I get from all the blood, sweat, tears (and money) involved with a renovation?
Much like other answers in this article, the exact ROI will vary as all home buyers don’t value the same things, and nobody knows if home offices will recede to the background of buyers’ wish lists in upcoming years.
But trends show that upgraded roofing, flooring, kitchens, bathrooms and landscaping will always yield a healthy ROI of up to 100 percent of the cost.
— Inman News