Creating new space can be an exciting project for homeowners. In many cases, it’s also a good financial investment. Adapting your home to better suit your lifestyle often beats the cost of buying a new house and the hassle of moving. And with interest rates still hovering at historically low levels, home equity loans are an affordable option for financing a major remodel.
But, enlarging your home won’t be a walk in the park – unless you enter into a partnership with a proven remodeling company that’s a cut-above the rest. Room additions are complex, expensive and time-consuming. So you need to approach any major renovation project with your eyes wide open.
You can create additional space in your home and prepare for your remodel with these 7 steps:
Start by getting referrals from friends, family and neighbors. Also, research companies and contractors online by visiting the Arizona Registrar of Contractors. You want to hone in on contractors that have ample experience in projects like yours and have rock-solid reputations.
Once you develop a short-list of possible partners, schedule interviews. Organize all the information you’ve gathered about your project so you can go over everything with prospective contractors. Before the interview, have a complete list of questions for each candidate.
Next, you can start to consider price. If you put price above other qualifications, you may not get the desired end result.
Finally, you don’t have to accept what many homeowners see as the status-quo in the remodeling industry: contractors who go over budget, don’t show up on the
job as scheduled, cut corners on quality to earn more profit, let the project drag on and on beyond the scheduled completion date, and other nightmare scenarios.
Think about how long you expect to live in your current home. If you’re a short-timer, like less than five years, creating additional space may not be financially practical. The amount of time you expect to stay in the home should be sufficient for you to recoup your investment.
For example, if you want to add a mother-in-law’s suite that will cost in excess of $60,000, research what your home’s value will be after the remodel. If your home’s current value is $500,000, but it will only be worth $525,000 after you remodel, you’d be losing money on your investment should you decide to sell.
The right contractor will have professional project managers on staff to make sure things go smoothly. Your contracting team should educate you about your project throughout the entire process so you know where your money is going.
If you don’t have a good contracting partner who nails down a solid budget at the start, too often remodeling project costs can spiral out of control. The last thing you want is to get your heart set on creating the home of your dreams, only to find out you can’t afford it.
After you determine budget, get your ducks in a row with funding your project. Will you use your savings and are they sufficient to cover the project cost and contingencies?
Or do you want to take advantage of low interest rates and finance your project? If you finance, it’s a good idea to shop around for the best type of loan product for your situation. Consider speaking with your financial advisor about the benefits of refinancing your current mortgage or securing a home equity loan. Also, get pre-approved for the total amount so you won’t have any surprises once your project is underway.
To properly evaluate your intended addition, you and your contractor will consider factors such as:
- Shape of your lot
- Remaining outdoor space after your addition
- Landscaping limitations (like large trees)
- Privacy from neighbors
- Leveraging views
- Outdoor access, if applicable
- Structural limitations, especially if you’re building a second floor
- Protection from the elements
- Adherence to current building codes and HOA regulations
- Consistency with existing homes in the neighborhood
- Issues with neighbors (like obstructing their views)
A good remodeling contractor will investigate whether your systems can accommodate the new space before starting your project and factor additional costs into the budget. If your contractor wasn’t thorough in the budgeting of your project, you could be in for sticker shock when you find out you need upgrades.
For example, new HVAC equipment can be very costly. In addition, your current electrical panel may be at full capacity. Experts recommend upgrading a panel exceeding 70% capacity. And if you’re adding a bathroom, laundry room or kitchen, your contractor should make sure you’ll have sufficient water pressure and your water heater can serve the new space adequately.
For most projects, it’s important to work with an interior designer. However, many homeowners don’t want to hire additional professionals outside of their remodeling contractor. Fortunately, some remodeling companies have design professionals on staff and offer this service to their clients. Your contracting partner should offer a detailed creative design process so you know exactly what to expect when your project is completed.
In many cases, you’ll need to create contingency plans for spaces you won’t have access to during construction. For example, if you’re enlarging a kitchen, you’ll have to figure out how you’ll cook meals while construction is underway.
You also must come to terms with annoying living conditions. Regardless how careful your contractor is, you will experience dust, noise, strangers in your home and other disturbances. That’s just the nature of the beast when you’re remodeling your home. If you don’t think you can handle it, you may want to consider living somewhere else for the duration of your project.
Increasing your living space isn’t just a good investment, it’s an investment in your family. The time spent in your new space creates lasting, meaningful memories that money can’t buy. Prepare for this new adventure and educate yourself before the first wall gets knocked down and you will have a seamless experience.