How Much Can You Afford?

This question alone is enough to strike fear into anyone's heart. The truth is not many people enjoy establishing a remodeling budget-and many just don't. Many homeowners prefer to call a remodeling contractor and expect him or her to create the budget for them, which is not the best way to begin. How do you start off right? You can begin by taking these easy steps in the right direction:

Decide how long you plan on staying in your home. The length of time you intend to stay in a home will affect how much money you should invest in it. If you are going to stay in the home for more than ten years, you should spend as much as you are able to create the home of your dreams. However, if you are planning on moving in the near future, you should not overbuild for your neighborhood. Look into the real estate comparisons for your area and keep your investment in line with the average home sales price. You don't want to invest thousands of dollars you won't be able to recoup at closing.

Once you determine how much you can afford to spend on a remodeling project, increase that amount by 10-20 percent. This money should be put in a reserve account to cover any change orders or incidental charges accrued along the way, which will prevent a frantic scramble for additional funds at the end of a project. You also might want new furniture, new curtains, etc., when the project is complete.

Remember that your choice in products will determine the cost of the project. There are many different levels of products and quality as well as price ranges. The cost difference between good, better and best components projected overtime, is immaterial in comparison to the extended service, utility and appearance of the best available products.

Project cost will vary depending on your location, the size of the room, and what features or options you choose. Your best bet for establishing and meeting a realistic budget is to hire a professional remodeling contractor. Your contractor should be familiar with many of the financing options available and be able to help you arrange the financing you need.