One of the pitfalls of property improvement is the ever-present temptation to over-capitalize, a common remodeling mistake. Major home improvement presents a tantalizing opportunity to add a master suite or that new kitchen you’ve always wanted. But for a truly satisfying experience, make certain that the new addition is going to provide a good return on investment (ROI).
The tendency to over-capitalize is a common problem when remodeling and is one of the most costly remodeling blunders. When first venturing into home improvement, some simple tactics will keep your budget on track and you won’t make the frequent remodeling mistake of over-capitalization.
Run the numbers
As a starting point, you’ll need to know what your proposed remodel is going to cost. Work out what the total investment – cost of renovations plus initial cost of home – will be. This is the figure you’ll need to realize from the sale of your home. If you’re planning to live in the home for another five to ten years, the cost of the remodel may be offset by the pleasure and convenience it will provide.
If the remodel is intended to add to the value of the home before a sale, you’ll need to consult with a real estate agent to ascertain the market value once the renovations are complete. If your renovations will put the value over the current market rate, you may need to go back to the drawing board to avoid an expensive remodeling mistake.
Talk to the experts
There are qualified professionals like interior designers, real estate agents and building contractors who will give you input about the plans you have for your home. A reputable company will be anxious to have a satisfied customer and should dissuade you from doing work that is going to make your remodel cost more than it’s worth. Do you research to find the right contractor and you can ask questions without worry.
Compare with the neighbors
It’s fundamental to know the equivalent values of other homes in the area before you begin work – you are less likely to make a remodeling mistake by over-capitalizing. For instance, if the neighbors’ homes have master suites and you’re planning to add a master suite, find out the market value of those houses. You are in danger of making a remodeling mistake if your master suite is likely to push the cost up over that of other homes with the same amenities.
Watch out for scope-creep
Use all the information and advice you have gathered for your home remodel to triple-check that your project remains on track and doesn’t become a target of scope-creep. Scope creep is a factor in project management that refers to uncontrolled changes or nonstop growth in a project’s scope, usually leading to runaway costs, a huge remodeling mistake!
The project must be properly defined and well documented. You should have a contract or written agreement with your contractor based on a fixed estimate for the work outlined. By adhering to the written contract, all involved will be inspired to stick to the set budget and time-frame.