Property renovation can cost you a small fortune depending on the refurbishment level. A property is renovated for reasons like making it inhabitable or improving its market value to make some profits from its sale. Renovation is done after deliberation and the budget for it takes months to set up. But there are lots of ideas to remodel your house without “breaking the bank”.

·         Decide whether you need an architect

Some sort of renovations can be carried out only with the help of an architect, but small-scale extensions and internal remodelling may not require them. You should consider the alternatives to keep your renovation budget smaller.

Draw up a plan to decide what renovation you want to take up. Not all big changes will be necessary, so it is better to leave them out. Ask yourself the following questions:

·         What renovations do you want to take up?

·         What are you willing to let go?

·         What are you willing to splurge on?

There are things you can do on your own. You can be your own project manager for big alterations to be made. There is no need to hire a professional painter as you can paint yourself. Pick used or refurbished items wherever possible. Brand-new items will simply add to your renovation cost.

If part of your property is to be demolished, do it on your own. You can save hundreds of pounds on the demolition cost.

·         Figure out financing before you build your renovation budget

Determining the estimated cost for the renovation of your house particularly depends on the type of financing you choose. Small renovations can be paid for in cash. In case you fall short of it, you can use a credit card. It will not affect your budget much if you pay off the balance within the grace period.

Once you have figured out how much you can afford to spend, set aside 20% of it for unexpected expenses. It is hard to know the actual cost before the implementation of your project. These savings will help cover the additional cost on top of what you have already borrowed. There are various types of financing options you might consider to fund your renovation project:

·         Home equity loans

Home equity loans will let you borrow up to 80% of the equity you own. You will get lump sum money and pay it back over a number of years. You can also opt for a line of credit.

You can take out money as and when you need and will be responsible to pay interest on the amount you owed.

·         Home improvement loans

A house renovation loan from a direct lender does not require any collateral. You can complete your house faster without the risk of losing any assets in case of default. You will get money in a lump sum that you pay down over a couple of months.

·         Cash-out refinance

It lets you convert your equity into cash. You take out a new mortgage to replace your current one, and the balance is paid to you in cash, which you can use to fund your renovation project.

·         Request bids from multiple contractors

The next step is to find a contractor. Contact local companies to obtain bids for your project. Do not grab an offer in the first place. You should rather receive quotes from at least three to four contractors to compare the costs.

·         Make sure you ask for references. You must have an indication of their previous work.

·         Check reviews. Get information about what people have to say about the contractor you want to pick.

·         Be clear and transparent about your budget. When your contractors know you are on a tight budget, they will likely talk through additional expenses, project delays, and project changes.

·         Make sure your contractor thoroughly understands your needs.

Bear in mind the following instructions while choosing a contractor:

·         Do not fall into the trap of cheap labour. It sounds appealing, but it is open to many errors that can cost you in the long run.

·         Cut down on your renovation project if none of the contractors’ bids fits in your budget. Include renovations that are necessary.

·         Read online reviews to know the quality of their service.

Negotiate with the contractor you have selected for your project. Take the opinions of your contractor to make your renovation budget-friendlier.

·         Keep a list of your cost estimates

Make a list of expected costs, so you know the actual cost is not too high. Having the list of estimated costs will help you know how much you will have to save. The following table shows the estimated cost for the most common remodelling projects:

The cost estimates for a particular renovation project depend on the labour and materials.

·         HomeAdvisor is the best platform to determine the average labour costs for your renovation project. It includes the labour charges of architects, plumbers, engineers and other workers. It usually costs up to 40% of your renovation budget. This platform can also introduce you to professional service providers.

·         Include the cost of fixtures as well. Calculate how much you will spend on knobs, faucets, handles, paint, flooring and the shipping cost for the material. You can check the cost of fixtures online. Generic fixtures will cost you less money than branded ones.

·         Include the cost of appliances you want to fix in your house. It also includes the cost of delivery and installation. Old but finely working appliances should not be removed.

·         Determine your living expenses during the renovation project. How much money you will have to spend when your kitchen is not in order is another thing to take into account.

You can discuss the estimated costs with your contractor and find ways to keep them to the minimum.

·         Choose the right time

Contractors are in high demand during the summer season, so you will end up paying a lot more money on labour charges. The spring season is also not an option if you want to save money on the renovation of your house. In the fall season, you will get a budget-friendlier bid because the weather is not very cold, and the demand for contractors is not as high as in the summer season.

However, outdoor projects can be put off because of rain. The winter season is also good, but only for internal renovations. Inclement weather conditions can prevent outdoor projects from being completed.

The bottom line

It is quite expensive to renovate your house and therefore you may take some time to set aside enough money to carry out your refurbishment project. You can take out a loan in minutes to cover the shortfall in cash in your savings, but you should try to complete your project within the budget. Because you will have to pay interest on your home improvement loan, you should consider this factor to determine your affordability.