When you decide that you want to take on a major home addition, the costs can add up quickly! You’ve got a dream in mind, but you want to make sure that it won’t break the bank in the process. Home addition costs can be daunting, but by properly assessing your existing property, the addition you want, and your budget, you can ensure that you get the addition you need without completely blowing your budget.
Do you have a $40k dream on a $20k budget? Then it’s time to reassess your home addition costs. But, the good news is, your home addition dream can still become reality.
6 Keys to Properly Assessing Home Addition Costs
1. Check your contract.
When you sign on the dotted line, you assume that you’ve agreed to a final price for your addition. Unfortunately, that’s not necessarily true. If you haven’t signed a fixed contract with a detailed outline of the work that will be performed, incidental costs, change orders, and other small expenses can sneak up on you, leading to increased home addition costs. Make sure you check your contract for those key details before you sign.
2. Add to your budget.
You have an existing amount in mind when you set your budget. Chances are, you’ve discussed it with your contractor, and they’re committed to helping you stick to that budget as closely as possible. Unfortunately, unexpected expenses, including emergencies and unanticipated problems, can add to your budget and final cost. Ideally, you want to set aside an extra 10 to 20 percent of your budget in reserve to help cover those unforeseen expenses.
3. Assess your project completely.
Be realistic about what you’re going to need to complete your project. Are you adding a kitchen that will need appliances and extensive electrical work? A bedroom that will need flooring that matches the rest of the house? Make sure you consider all of the details of your project so that the final costs don’t sneak up on you. You should also be sure to evaluate how the addition will attach to your home. Will you create a door in an existing wall? Do you need to add a floor to your home? Does the addition need a second floor in order to match the existing structure? Make sure you answer all of these questions before beginning your home addition project.
4. Check your zoning restrictions.
In some residential areas, there may be rules about where you can build and how you can add on to your house. Don’t end up trapped into paying fines or removing your addition by poor pre-planning! Check out the zoning restrictions before you begin to make sure that your project is realistic. Make sure that you can place your addition exactly where you intend to place it and that you aren’t going to put yourself in a bad position as you begin.
5. Don’t forget the design fees.
Pay attention to what your contractor covers when you’re looking over your budget. If an architect’s expertise isn’t part of the process, you’ll need to expect to add that on — to the tune of about 15 percent of your current budget. Some contractors do include this as part of their contract, so be sure you understand what you’re responsible for before the home addition process begins.
6. Look at loan fees.
Are you taking out a loan to pay for some or all of your home addition costs? If so, make sure you’re calculating the interest and fees on that loan into your home addition budget. While you won’t have to pay that cost up front, it will add up over time, often significantly increasing the cost of your home addition. It can be more practical, in many cases, to save a little bit longer in order to put down a larger percentage of your home addition payment.
Building an addition to your home is a welcome increase in space and functionality. Before you begin your project, however, you should have a firm understanding of the budget you have and how much you’ll need to spend to make the project reality. You might not be able to anticipate every possible expense that will come along with your project, but by making a solid start on creating a realistic budget that allows for emergencies and includes all the critical details of your project, you can end up with an amazing home addition that doesn’t break the bank in the process.