Home Renovation Costs You Need to Factor into Your Budget

Renovating your home can be a great way to build equity, increase the value of your home, and improve your experience living in it overall. Of course, if you want to have a successful home renovation experience, one of the things you’ll need to do is figure out your budget. In order to do that, and have it be accurate, there are some costs you’ll need to factor in.

Sales Tax

If you’ve gotten quotes for materials and supplies, or have looked at prices for things at all, you may have noticed that the dollar value provided is simply the cost of the items themselves. It doesn’t factor in sales tax. Sales tax is an additional cost that can quickly eat into your budget if you don’t plan for it. It’s a set percentage of the value of the items you purchase that gets added on to the initial cost to create your final total. The percentage varies by location, and is set by state and local governments. Look into the sales tax rate in your area so you can get an idea for what you should expect to pay, and therefore plan for in your budget.

Permit Costs

Once you’ve settled on what you want to renovate and how you plan to do it, it may be tempting to just grab your tools and supplies and get to it. Don’t get cracking just yet though. Some renovations require you to get a permit before starting. Starting in on such renovations without a permit can end up costing you big time. You could end up having to undo everything you’ve done, get the requisite permit, and do it all over again. Figure out if your renovation will require a permit, learn how much the permit will cost, and factor that in when you’re planning your budget.

Unexpected Expenses

It’s perfectly normal for unexpected expenses to crop up when doing a home renovation. It could be something as simple as the price of materials increasing, or it could be because you ran into unexpected difficulties with electrical wiring or plumbing that require professional expertise. Whatever the reason, it’s always a good idea to build in some money to cover unexpected expenses. Allot 10-25% of your budget for that purpose. You’ll be relieved you did.

Successfully planning out your budget for a home renovation can make the difference between a project that is complete with minimal delays and one that drags on and on. As you plan your home renovation budget, be sure to factor in costs like sales tax, permit costs, and an extra amount to cover unexpected expenses. Your renovation will go more smoothly and you’ll be less stressed about the financial aspect of it, and that’s something that can be worth its weight in gold.

Check out this article on improvements that can spruce up your home’s appearance!