Ready to Remodel? 7 Tips to Plan a Successful Renovation

Working and learning remotely for the past year has caused many people to reconsider what “home” means to them. Preparing more meals at home can lead to dreams of modernized kitchen, and lack of space can quickly become apparent when everyone is home at the same time for months. For those who have not experienced financial challenges due to the COVID-19 pandemic, this renewed interest in home life has led to a significant increase in home improvement projects. Whether you embrace a DIY spirit, or prefer to hire a professional contractor, home renovation projects, large and small, require planning and financial consideration. Here are 7 tips to help you plan a successful renovation:

1. Prioritize projects that will yield a great ROI.

Take a tour of your property, inside and out, and make a wish list of everything you would like to improve. Don’t censor yourself. Remember, there’s no judgement in brainstorming, so take an inventory of each room, and walk around outside, and write down every idea that comes to mind.

Next, whittle that list down to the projects that will give you the best return on your investment, or ROI. If you’re going to invest time and money into a project, it makes sense to complete a project that will increase the resale value of your property. Kitchens and bathrooms always rank high because potential buyers appreciate modern facilities, so move those projects to the top of the list.

Need more ideas? The Washington Post recently studied home improvement projects through a partnership with HomeAdvisor. Their findings also ranked garage door replacements, adding manufactured stone veneers, and upgrading entry doors high on the list of projects with significant ROI. In addition to kitchens and bathrooms, Fortunebuilders.com rates landscaping and attic conversations in their top 10 ROI projects for homeowners. With a little planning and research, you’ll find the project that meets your needs and adds value of your home.

2. Create a budget.

How much can you spend? Whether you plan to use funds from your savings account, or finance your project through a home equity loan or home equity line of credit (HELOC), it’s important to know how much you can afford to spend and establish a budget before you start renovations. Once you have project estimates in hand, some experts suggest building in a 10–15% buffer to accommodate unplanned expenses that may arise during construction.

Also, be sure to include the money you’ll spend on accommodations during the renovation. For example, if you’ll be purchasing more takeout than usual during a kitchen remodel, factor the cost of those meals into your budget. If you need to rent storage space while you’re remodeling a bedroom, that should be a line item in your budget, too. Will you need to invest in a security system? Do you plan to install child safety locks, pet gates, or electric outlet covers to protect children and pets? Consider all the “extras” you need to employ during construction. As you develop your budget, feel free to reach out to your Banker to discuss budgeting and financing options.

3. Properly vet contractors.

Finding a reputable, professional contractor is critical because shoddy work will wreak havoc on your budget (and your stress level). To avoid overspending because a job wasn’t done right the first time, or poor workmanship in one area led to damage in another area of the home, take the time to research contractors thoroughly before you sign on the dotted line. A few good resources include:

• Family and friends: Ask people you know and trust for recommendations.
• Professional associations: Search the National Association of the Remodeling Industry (NARI) membership database. Enter your zip code to find local members.
• City and county offices: Consult with your local city and county code enforcement and building departments for a list of approved contractors in your area.
• Online services: User review websites, such as Angieslist.com and HomeAdvisor.com, can help you narrow down your search for the perfect contactor. Some sites charge an annual fee for access, but many are free.

Check out a list of user review services and fees, at ConsumerReports.org.

• Ask questions: Engage in open dialogue with potential contactors. Feel free to do phone interviews first, and then meet in person. Ask them to provide before and after photos of their work, and a list of references. Reputable contractors won’t mind answering questions or providing additional information. For a list of sample questions, and more information on choosing a contractor, check out some great tips from This Old House.

4. Compare bids.

Once you find reputable contractors, secure bids from your top choices. Proposals should include the cost of all expenses, including materials, labor, and profit margins. According to This Old House, materials typically account for 40% of the total cost, and the remainder covers overhead with a 15-20% profit margin.

5. Always acquire proper permits.

While it may seem tempting to save time and money by foregoing the required permits, don’t do it. Permits are required to uphold structural requirements and safety standards.

You’ll spend considerably more if inspectors determine the work must be redone because it does not meet the building code in your area.

6. Check in with your insurance agent.

If the unexpected happens during renovations, such as a weather event causes damage or an accident occurs, it’s important to know what your homeowners insurance will cover, and what your contractor’s business insurance will cover. Check in with your insurance agent and ask your contractor for a copy of their policy before work begins.

7. Always get it in writing, and pay in full after the work is completed.

Written estimates and signed contracts are important. They protect you and your contractor. Be sure to document your agreements, and make the final payment  only when the job is done to your satisfaction.

Learn More

Fidelity Bank has built a strong history as trusted advisors to clients served, and is proud to be an active member of the community. With branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24 hour, 7 day a week service to clients through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 1-800-388-4380.

Daniel J. Santaniello, President, and CEO, of Fidelity Bank, publishes Financially Fit with Fidelity, your guide to financial well-being, every Thursday. If you’re interested in a financial topic we haven’t yet covered or want to subscribe to our emails, please feel free to drop us a line at blog@fddbank.com. We would love to hear from you.