Calculating the cost of your home addition is important. Often, homeowners fail to calculate costs effectively—leading to financial mistakes and under estimation of total expense.
An addition may contain hidden costs, and maintaining your budget is among the most important parts of the process. When figuring your home addition’s cost, take advantage of these three tools. You’ll save yourself some problems by using them, and you’ll have a much better handle on the overall scope of the project.
Tool One: Cost Index
The Home Cost Helper Index contains a wealth of information relevant to home additions. Remodeling an existing house can cost more than new construction, as additions must be tailored around pre-existing conditions.
Take a look at the Home Cost Helper index to get a general idea what kind of budget you will need to consider before beginning a home addition project.
Of course your actual costs can vary widely, mostly based on where you live. So you should consult local experts to get more realistic projections. Architects and contractors can be a great help in this area.
Tool Two: This “Budget Equals Cash Plus Borrowing Power” Equation
When planning your project, make a list of all the building materials and equipment you can think of. Put the costs in an estimate spreadsheet. Increasing a home’s value requires an effective use of resources, and it requires an effective list to comprehend it all.
Understanding “borrowing power” is important. Your local mortgage lender can assist with your project’s valuation. They also can assist with borrowing. If you’re considering getting a loan—factor borrowed funds into your total budget equation. In the end, your equation should look like this:
Budget = Cash + Borrowing Power
Combining borrowed finances with total, spendable cash dictates your budget. Your total funds indicate your spending potential. Financing effectively is incredibly important for any home addition project.
Not only does it create a “safe building” environment, fiscally, it also helps create an accurate “home value” price. If you ever resell your home, you’ll have a literal shopping list of the items that went into building the addition and that can be a valuable sales tool.
Tool Three: Your Local Contractor
A general contractor is a wealth of material resources, information and skill. Professional assistance guarantees quality project management and that helps you maintain high-standard goals.
Additionally, your contractor understands industry regulations. He or she knows the “laws of the remodeling land”. They can offer guidance that can help you save money in the long run.
When building an addition, your contractor can ensure that you are using the best materials for the job. While identifying costs is important, obtaining quality supplies is equally important. Contractors have been industry experts for years, and they can assist with all aspects of home addition projects including the all important cost aspect.
Why are Addition Calculation Tools Important?
Like any project, home remodeling consumes resources. Time, labor and money are these resources, and when you don’t plan, that leads to lost money, wasted time and poor execution. On paper, a remodeling project may look simple. It may look easy, too. However, that is a misconception. As with any project, planning is everything.
Approaching a home remodeling project with careful planning is important. The structural planning and design planning is best left to the professionals like architects and contractors. However the financial planning falls on your shoulders.
So prepare for your responsibilities and you will ensure that your home addition project stays on track and doesn’t break your bank.