Hidden Costs of Home Remodeling

There are hidden costs associated with most remodeling projects. Home additions also have hidden costs. Many Denver homeowners are surprised by these costs, however. Some of these hidden costs of home remodeling can be expected. With some careful planning, you can avoid or reduce some of these costs completely.

Two of the hidden costs of home remodeling projects can be completely eliminated by planning carefully and sticking with the plan throughout the project. These are the cost of making late changes and the cost of upgrades. There is a simple rule of thumb to keep in mind: every time you change your mind after materials have been purchased and work has begun, it will cost you money. Every change in the design, layout, materials, or work of your project will cost more than your original estimate. Every time you change your mind about a fixture, fitting, appliance, etc. it will also cost more money. Everything that happens in the course of the remodeling project that slows work or makes the remodeling contractor or the work crew wait for something, will add cost to your project. And this cost will be in addition to any additional cost of the new fixture or material. Making changes that involve undoing work that has already been completed will be very costly because you will pay for the original work, for tearing it out, and for re-doing it in the new way.

By the same token, anything that requires an unplanned update or upgrade or repair, will also cost more money. And unexpected delays or problems will also involve extra cost. For example, late delivery of key materials will result in the cost of paying the work crew to wait until it arrives. If the delay makes the crew late starting another job, you could also be forced to pay a penalty.

The costs of financing the money used to pay for the remodel or room addition is also a hidden cost. Most homeowners recognize this as a cost of the remodel at the time when they sign the papers, but few actually add this cost into the total cost of the home improvement project. If your project is large, the finance charges and interest paid on money borrowed for home improvements can be significant. If you are making home improvements prior to putting your house on the market, you will want to include these costs in calculating the return on your investment and the selling price of your home.

The next hidden costs of remodeling are a result of the increased value of your home as a result of the addition or improvements you make. There are three possible impacts of your remodel: increased (or decreased) utility bills, additional insurance costs and increase in taxes. Your home improvements will either increase the size of your home or make your home more energy-efficient, or both. This will affect your utility bills in some way – either increase or decrease. Any increase is a hidden cost of the addition to your house. Your remodeling project will also increase the value of your home. Increased home value will translate into higher insurance premiums and higher real estate taxes.

If you are doing the work yourself, you will probably need to be sure to include the cost of tools, equipment and safety equipment, whether you buy or rent. If you can borrow tools and equipment, you will save on this cost. If you find that you need specialized equipment that you will not need again in the future, you will probably save money by renting. Another idea is to purchase what you need and then sell it when the project is finished. This will recover at least part of the cost.

Finally, sometimes it is necessary to leave your home for some period of time during a large remodel. Another hidden cost of your remodel will be the cost of lodging and meals for your family and, possibly, for your pets.

Keep in mind that with careful planning you can reduce or eliminate many of these hidden costs of home improvement.