The kids are old enough that they each need their own bedroom. You’ve just taken a new job that lets you telecommute. Your mother-in-law is getting up in years and needs to come live with you.
Whatever the reason may be, you’re now looking into building an addition to your home … and you’re not sure how to plan for the expenses.
Tips to Help You Budget For Building an Addition
What Type: Out or Up?
One thing that homeowners agonize over and the most important factor when considering a home addition is, what type of addition to do. Depending on the type, whether you want to build outward by adding onto the front, side or back of the home or to build upwards by adding a room onto the second floor or adding a second story on to the existing structure, both have the benefit of adding extra square footage and value to your home, but both plans also have drawbacks and expenses.
Building out, for example, includes the cost of pouring a new foundation under the area being constructed. You’ll also need to check with your city’s zoning laws to make sure your addition doesn’t run into problems or local zoning regulations. Another drawback with building out is you lose some of your yard or outdoor space but you gain living space square footage.
While building upwards eliminates the foundation and footprint issues, it may require you to strengthen your current foundation to handle the weight. In addition to this, those pesky zoning laws may strike with this method as well, by limiting the height at which houses in a particular area can be constructed. Also, another drawback with building upwards is you have to add a staircase (which you might not of had before) taking away from your existing living space.
Since there’s no cookie-cutter answer for how much either method will cost or if they’ll be approved by your city, your best bet is to get an estimate from a professional and reputable contractor.
Hire a Reputable Contractor
Wait: isn’t working with a contractor adding cost to the bottom line? Yes, but it’s cost that really pays off in the end. First of all, working with a skilled contractor that has experience in building an addition means that you have someone on your side, not only, giving you an idea of the potential cost up front but who can also provide invaluable finishing ideas and product insight. Then depending on the size and complexity of your addition, a reputable contractor can also provide guidance on whether you should consult with an architect to make sure the addition design flows with the rest of your home and/or to hire a structural engineer to insure the plans are sound. This is preferable over you winging your way through the process and being blind to what may come up along the way.
In addition to this, a contractor knows how to do things right the first time around. What seems like an added expense at the beginning actually ends up saving you money in the long run by not have to redo things like cutting open walls to fix a plumbing issue or call the fire department to put out an electrical fire. When it comes to larger more complex projects like a home addition, it is highly recommended and beneficial to hire a professional, especially one with years of experience.
Draw Up a Clear Contract
When working with a contractor on building an addition, make sure to get everything in writing before the project starts. The contract needs to clearly spell out what’s included in the price so that random fees and costs don’t pile up and bury you during the project. Keep in mind that no contract can account for unexpected problems that may be discovered during the project (such as a rotted, water-damaged floor in the area that you were hoping to turn into an extra bathroom.
Factor an Emergency Reserve into Your Budget
Since unexpected emergency expenses arise so frequently, it’s a good practice to expect the unexpected. Factor in about 10 to 20% of your total projected cost and add that to your budget as an insurance policy. Hopefully, everything will go as planned and you won’t need it. If you do, though, your project won’t get derailed by completely breaking your bank account.
Speaking of the Bank
If you’re planning to finance your home addition, don’t forget to factor those fees into the overall cost. Some people forget to consider these costs. While you will get to pay them over time, you still have to pay them, so you should keep them in mind when considering how much you want to spend in total. With careful planning that includes looking at the project from all sides (even the potential negative what-ifs), building an addition will be an exciting project that moves along smoothly with no financial pitfalls.
Don’t let your dream home be delayed any longer! With our new unbeatable financing options, there’s no reason to wait on that project you’ve been wanting to complete. The rates are so great, you may even be able to upgrade and make more renovations that will truly turn your home into the dream home you’ve always wanted!