Bad time for home renovation?

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Topic Author
barneycat
Posts: 74
Joined: Tue Mar 06, 2018 7:38 pm

Bad time for home renovation?

Post by barneycat »

Hello fellow Bogleheads,

I previously posted (viewtopic.php?t=353400) about our take on the renovate versus move question. The conversation, while challenging to read at points due to our circumstances and our spending (inherited wealth versus earned), was incredibly helpful.

Since then, we've really cleaned up our budget, so we understand where our money is going. Our spending doesn't reflect our values yet, but we have a path toward reaching that in the coming three to five years. We are not going to buy a house in these more expensive neighborhoods.

Current portfolio balance: $5.2 million
Current take from the portfolio: $240,000 or 4.68%.

- $86,000 for estimated taxes (can't control)
- $36,000 to "recoup" for 401k and ESPP (could cut out, but think this is a good idea)
- $60,000 for kids' school (playing the magnet, charter game and looking at others to lower)
- $58,000 (1.13%) budgeted for home repairs, car repairs, vacations, medical expenses, presents, charity. We are currently slightly below glide-path for the year on actual spending.

Now to my question: is now a bad time to launch our planned home renovation?. My plan is to fund it ($450k) with the Schwab PAL and then pay off over 3 years using capital gains distributions and dividends so we don't have to sell funds.

My gut says yes, this is a bad time, for the following reasons: 1) as many have stated - we require both income and portfolio performance for our lifestyle; one of those is currently down, 2) the costs of a renovation are at an all time high and this is a discretionary purchase with no harm in waiting a while, 3) uncertainty moving forward clouds any sort of projections I've run.

I ask because for a few reasons:

- I genuinely value the opinions here, and have nobody in my life to turn to for questions like this
- I'm probably overly conservative in my planning and am the saver in the household
- I tend to overweight others' feelings and am dreading the conversation with the architect/builder (just as with leaving our FA)
- My wife is onboard with the goal of spending no more than 2% of the portfolio balance (recommended by our old FA and one prominent FA on this board as a compromise between our views). This decision is separate from that and I don't know if I'm being the stodgy miser again here.

So, thanks again for reading and your advice.
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ClevrChico
Posts: 3259
Joined: Tue Apr 03, 2012 8:24 pm

Re: Bad time for home renovation?

Post by ClevrChico »

From what I've seen with neighbors and colleagues, even if you want to move forward, you may be put on a long waiting list. Also, quality may suffer due to staffing issues. Prices are also eye watering right now. I've put anything outside of DIY on hold.
London
Posts: 722
Joined: Sun Dec 11, 2016 10:50 am

Re: Bad time for home renovation?

Post by London »

We’re all going to die someday, who knows when. If you want to do this renovation and it’s sub 10% of your net worth, why time the (contractor) market?
Topic Author
barneycat
Posts: 74
Joined: Tue Mar 06, 2018 7:38 pm

Re: Bad time for home renovation?

Post by barneycat »

ClevrChico wrote: Sun May 22, 2022 7:23 am From what I've seen with neighbors and colleagues, even if you want to move forward, you may be put on a long waiting list. Also, quality may suffer due to staffing issues. Prices are also eye watering right now. I've put anything outside of DIY on hold.
You are absolutely right on the timing. Our architect (also the contractor) seems to be managing the workload well - we are in line and they base construction off of windows. So, if we signed tomorrow we'd likely begin construction in the fall.
runner3081
Posts: 5994
Joined: Mon Aug 22, 2016 3:22 pm

Re: Bad time for home renovation?

Post by runner3081 »

ClevrChico wrote: Sun May 22, 2022 7:23 am From what I've seen with neighbors and colleagues, even if you want to move forward, you may be put on a long waiting list. Also, quality may suffer due to staffing issues. Prices are also eye watering right now. I've put anything outside of DIY on hold.
Same here. Have not heard a positive remodel story in the past two years (bathrooms, kitchens, paint jobs, etc). Delayed projects, no-show workers, substitute materials, and on and on. We are also waiting another 2 years.
User avatar
ClevrChico
Posts: 3259
Joined: Tue Apr 03, 2012 8:24 pm

Re: Bad time for home renovation?

Post by ClevrChico »

barneycat wrote: Sun May 22, 2022 7:26 am
ClevrChico wrote: Sun May 22, 2022 7:23 am From what I've seen with neighbors and colleagues, even if you want to move forward, you may be put on a long waiting list. Also, quality may suffer due to staffing issues. Prices are also eye watering right now. I've put anything outside of DIY on hold.
You are absolutely right on the timing. Our architect (also the contractor) seems to be managing the workload well - we are in line and they base construction off of windows. So, if we signed tomorrow we'd likely begin construction in the fall.
Excellent, that's not too bad!
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Sandtrap
Posts: 19591
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Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

Re: Bad time for home renovation?

Post by Sandtrap »

barneycat wrote: Sun May 22, 2022 7:17 am Hello fellow Bogleheads,

I previously posted (viewtopic.php?t=353400) about our take on the renovate versus move question. The conversation, while challenging to read at points due to our circumstances and our spending (inherited wealth versus earned), was incredibly helpful.

Since then, we've really cleaned up our budget, so we understand where our money is going. Our spending doesn't reflect our values yet, but we have a path toward reaching that in the coming three to five years. We are not going to buy a house in these more expensive neighborhoods.

Current portfolio balance: $5.2 million
Current take from the portfolio: $240,000 or 4.68%.

- $86,000 for estimated taxes (can't control)
- $36,000 to "recoup" for 401k and ESPP (could cut out, but think this is a good idea)
- $60,000 for kids' school (playing the magnet, charter game and looking at others to lower)
- $58,000 (1.13%) budgeted for home repairs, car repairs, vacations, medical expenses, presents, charity. We are currently slightly below glide-path for the year on actual spending.

Now to my question: is now a bad time to launch our planned home renovation?. My plan is to fund it ($450k) with the Schwab PAL and then pay off over 3 years using capital gains distributions and dividends so we don't have to sell funds.

My gut says yes, this is a bad time, for the following reasons: 1) as many have stated - we require both income and portfolio performance for our lifestyle; one of those is currently down, 2) the costs of a renovation are at an all time high and this is a discretionary purchase with no harm in waiting a while, 3) uncertainty moving forward clouds any sort of projections I've run.

I ask because for a few reasons:

- I genuinely value the opinions here, and have nobody in my life to turn to for questions like this
- I'm probably overly conservative in my planning and am the saver in the household
- I tend to overweight others' feelings and am dreading the conversation with the architect/builder (just as with leaving our FA)
- My wife is onboard with the goal of spending no more than 2% of the portfolio balance (recommended by our old FA and one prominent FA on this board as a compromise between our views). This decision is separate from that and I don't know if I'm being the stodgy miser again here.

So, thanks again for reading and your advice.
To OP:

Based on actual real life experience similar to yours, also similar valuations etc, DW and I parsed "home renovations/property additions/etc" over a period of 10 years.
1
During this time: we staged the yearly spending to within between 3-4 percent of total portfolio valuation "without" additional supplementation from outside income, work income, salary, wage, loans, etc. ***This included living expenses.
2
We did not borrow a dime. No HELOC. No Line of Credit. Etc.

It worked out well for us.
Our goals were:
1. That the portfolio be self sustaining (retain principle value).
2. That (ideally) the portfolio continue to grow. (it did because we kept spending down and also lowered our budget).
3. That we do not compromise quality or need to any of the many property projects we had on this long term plan.

What was different for us than perhaps most and many:
1. Our portfolio was all we have, plus R/E investments in income property, etc.
2. The spending level was much higher and valuations higher than some, with no employee wage/salary or employee security of income stream, etc.
3. The spending needed was a great proportion to net worth, so not a side project, hobby, or "nothing to lose" financial position.

Actionably: now or any time is a bad time if you do things badly and not well thought out and so forth, and VS VS.
Suggestion: do not let your judgements and so forth be "fear based" (sky is falling, lions tigers n bears).

To OP:
I hope this is helpful for you.
j :D

dis laimer: zillions of paths and options and opinionizations from zillions of folks with zillions of experiences, this is only one.
Wiki Bogleheads Wiki: Everything You Need to Know
HomeStretch
Posts: 11423
Joined: Thu Dec 27, 2018 2:06 pm

Re: Bad time for home renovation?

Post by HomeStretch »

In “normal” times I would expect a $450k renovation to overrun by at least $100k. In these times of material/labor shortages and price increases, I would expect your project to significantly overrun the budget by >20%, take longer (are you planning to live there while renovating?), and to make compromises on your material choices due to shortages/long delivery lead times. If you go ahead with the reno, consider paying cash rather than financing via a PAL for 3 years to get the spending behind you.

Before you move forward with the reno, consider doing some multi-year projections to identify exactly how you and spouse will reduce portfolio withdrawals to 0-2% through the salary increase you expected per your prior thread, reducing expenses and perhaps your spouse earning a salary.

Between the $450k+ reno cost, your portfolio value being down ($5.2 million now v. $6.1 million a year ago) and increasing your annual portfolio withdrawals from $120k/2% a year ago to $240k/4.68% now, it seems like you are going in the opposite direction. If it takes you 3-5 years to bring your portfolio withdrawals down to 0-2%, assuming no market returns your portfolio balance in 5 years could be reduced by $1.5-$2 million (depending on how much you are contributing to the 401k).

You are in your mid-30s.
- Have you targeted a retirement age and projected how you will achieve it?
- Do you have adequate life and disability coverage if something happens to allow you/your family to continue living in the same manner, pay for college and fully launch 3 kids?
- Is your spouse keeping their professional skills/network up-to-date in case circumstances change?

My sense is from your “stodgy miser” comment and your prior thread that you and spouse may not be on the same page regarding spending and your overall finances. If that’s true, consider sharing this thread with your spouse and including them in the projections process.
exarkun
Posts: 114
Joined: Fri May 19, 2017 12:19 pm

Re: Bad time for home renovation?

Post by exarkun »

barneycat wrote: Sun May 22, 2022 7:26 am
ClevrChico wrote: Sun May 22, 2022 7:23 am From what I've seen with neighbors and colleagues, even if you want to move forward, you may be put on a long waiting list. Also, quality may suffer due to staffing issues. Prices are also eye watering right now. I've put anything outside of DIY on hold.
You are absolutely right on the timing. Our architect (also the contractor) seems to be managing the workload well - we are in line and they base construction off of windows. So, if we signed tomorrow we'd likely begin construction in the fall.
We've been waiting for 6 months for our replacement windows (confirmed ordered by factory) so fall may be optimistic, unless you're willing to be flexible on the windows make, model, etc...
User avatar
Watty
Posts: 28860
Joined: Wed Oct 10, 2007 3:55 pm

Re: Bad time for home renovation?

Post by Watty »

barneycat wrote: Sun May 22, 2022 7:17 am My gut says yes, this is a bad time, for the following reasons: 1) as many have stated - we require both income and portfolio performance for our lifestyle; one of those is currently down, 2) the costs of a renovation are at an all time high and this is a discretionary purchase with no harm in waiting a while, 3) uncertainty moving forward clouds any sort of projections I've run.
You are missing what is by far the biggest problem with doing a big renovation now.

4) With the supply chain shortages and contractors being swamped with work doing a big renovation may take an absurdly long time.

Someone up the street from me bought a house that they are renovating before they move into it. I don't know the details but they are doing things like new siding, windows, kitchen, flooring, replacing an old deck, etc. That is a lot of work but it isn't anything like doing something major like adding a new second story or making a big addition.

They have had lots of delays and I heard that it took them over six months to get the new windows in. There was a problem with some of them and those needed to be reordered which added more delays. There were often weeks when no one was working on the house then there would be people working for a day then weeks more before anyone else was working at the house again.

So far it has been about 18 months that they have had to live in temporary housing. I was talking with them and they were feed up with waiting. The house was at the point where they could move into it even though the kitchen was not done yet so they did. They have a camping trailer in the driveway that they are doing the cooking in now.

It is easy to be loose with other people's money but in a lot of ways even if spending $450K is a mistake then you will still have a huge amount of money so you can afford that as long as you have gotten your other spending under control better than it sounded in your last thread.

There is no way that you would want to try to live in the house with that much work being done even if you could. It is likely that any renovation will take a very long time and much longer than any contractors says it might take

In your last thread you said.
Would you consider purchasing a $1.5 million dollar home if you were in our position?

Context
.....home value around $675,000 based off a recent comparable neighborhood sale. If we remain here, we will spend $200,000 in the next 12 months to update the home
Your renovation budget seems to have more than doubled since your post last year.

Did you buy the $1.5 million dollar home and you are renovating that, or are you thinking of spending that much to renovate a $675k home?

If it is the latter then it would likely be better to tear it down and build a new home on the lot.

Keep in mind that in your area a $675k property might be something like a $475K building on a $200K lot, but that varies a lot.

You apparently really like your neighborhood which is why you want to renovate. One option would be to buy a different house in your neighborhood then renovate that or tear it down and rebuild. That would save you from having to move into temporary housing for a year or longer.
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HMSVictory
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Location: Lower Gun Deck

Re: Bad time for home renovation?

Post by HMSVictory »

I decided to build new rather than renovate. Our home is estimated to be completed in August.

Our builder is a national builder with control of a lot of the supply chain (lumber factories) so it hasn't been bad. Construction really hasn't been delayed except for a day or two here or there. There is no way in heck I would attempt to do a home remodel job now with a smaller contractor that has to wait on supplies and materials. Sounds like a great way to have your home torn up and live in a construction zone for a year. No way!
Stay the course!
Topic Author
barneycat
Posts: 74
Joined: Tue Mar 06, 2018 7:38 pm

Re: Bad time for home renovation?

Post by barneycat »

To OP:

Based on actual real life experience similar to yours, also similar valuations etc, DW and I parsed "home renovations/property additions/etc" over a period of 10 years.
1
During this time: we staged the yearly spending to within between 3-4 percent of total portfolio valuation "without" additional supplementation from outside income, work income, salary, wage, loans, etc. ***This included living expenses.
2
We did not borrow a dime. No HELOC. No Line of Credit. Etc.

It worked out well for us.
Our goals were:
1. That the portfolio be self sustaining (retain principle value).
2. That (ideally) the portfolio continue to grow. (it did because we kept spending down and also lowered our budget).
3. That we do not compromise quality or need to any of the many property projects we had on this long term plan.

What was different for us than perhaps most and many:
1. Our portfolio was all we have, plus R/E investments in income property, etc.
2. The spending level was much higher and valuations higher than some, with no employee wage/salary or employee security of income stream, etc.
3. The spending needed was a great proportion to net worth, so not a side project, hobby, or "nothing to lose" financial position.

Actionably: now or any time is a bad time if you do things badly and not well thought out and so forth, and VS VS.
Suggestion: do not let your judgements and so forth be "fear based" (sky is falling, lions tigers n bears).

To OP:
I hope this is helpful for you.
j :D

dis laimer: zillions of paths and options and opinionizations from zillions of folks with zillions of experiences, this is only one.
Thanks for your perspective. It's always nice to hear of others going down a similar path and things working out. Your comment about "fear based" resonates with me. I'm continually refining my projections and they seem to be positive - yet I find myself catastrophisizing.
Topic Author
barneycat
Posts: 74
Joined: Tue Mar 06, 2018 7:38 pm

Re: Bad time for home renovation?

Post by barneycat »

HomeStretch wrote: Sun May 22, 2022 8:20 am In “normal” times I would expect a $450k renovation to overrun by at least $100k. In these times of material/labor shortages and price increases, I would expect your project to significantly overrun the budget by >20%, take longer (are you planning to live there while renovating?), and to make compromises on your material choices due to shortages/long delivery lead times. If you go ahead with the reno, consider paying cash rather than financing via a PAL for 3 years to get the spending behind you.

Before you move forward with the reno, consider doing some multi-year projections to identify exactly how you and spouse will reduce portfolio withdrawals to 0-2% through the salary increase you expected per your prior thread, reducing expenses and perhaps your spouse earning a salary.

Between the $450k+ reno cost, your portfolio value being down ($5.2 million now v. $6.1 million a year ago) and increasing your annual portfolio withdrawals from $120k/2% a year ago to $240k/4.68% now, it seems like you are going in the opposite direction. If it takes you 3-5 years to bring your portfolio withdrawals down to 0-2%, assuming no market returns your portfolio balance in 5 years could be reduced by $1.5-$2 million (depending on how much you are contributing to the 401k).

You are in your mid-30s.
- Have you targeted a retirement age and projected how you will achieve it?
- Do you have adequate life and disability coverage if something happens to allow you/your family to continue living in the same manner, pay for college and fully launch 3 kids?
- Is your spouse keeping their professional skills/network up-to-date in case circumstances change?

My sense is from your “stodgy miser” comment and your prior thread that you and spouse may not be on the same page regarding spending and your overall finances. If that’s true, consider sharing this thread with your spouse and including them in the projections process.
Thank you for this post. One clarifying comment: the 2% last year was for school and other spending and didn't include taxes and the investment recoupment - we are doing better than last year and better than the year before. Question for you about over runs:

1. I asked the architect/designer/contractor about overruns. He replied that they can't control material inputs and rates charged by subs, but they've provided "high end" allowance amounts for wiggle room. Do projects always go over? Or, if we just the guy's judgment, expect it to fall around the estimated amount.

Your other points are important to think about. Especially the last comment. My wife and I are directionally correct, but not entirely on the same page. She's reading along here.
Topic Author
barneycat
Posts: 74
Joined: Tue Mar 06, 2018 7:38 pm

Re: Bad time for home renovation?

Post by barneycat »

Watty wrote: Sun May 22, 2022 9:25 am
barneycat wrote: Sun May 22, 2022 7:17 am My gut says yes, this is a bad time, for the following reasons: 1) as many have stated - we require both income and portfolio performance for our lifestyle; one of those is currently down, 2) the costs of a renovation are at an all time high and this is a discretionary purchase with no harm in waiting a while, 3) uncertainty moving forward clouds any sort of projections I've run.
You are missing what is by far the biggest problem with doing a big renovation now.

4) With the supply chain shortages and contractors being swamped with work doing a big renovation may take an absurdly long time.

Someone up the street from me bought a house that they are renovating before they move into it. I don't know the details but they are doing things like new siding, windows, kitchen, flooring, replacing an old deck, etc. That is a lot of work but it isn't anything like doing something major like adding a new second story or making a big addition.

They have had lots of delays and I heard that it took them over six months to get the new windows in. There was a problem with some of them and those needed to be reordered which added more delays. There were often weeks when no one was working on the house then there would be people working for a day then weeks more before anyone else was working at the house again.

So far it has been about 18 months that they have had to live in temporary housing. I was talking with them and they were feed up with waiting. The house was at the point where they could move into it even though the kitchen was not done yet so they did. They have a camping trailer in the driveway that they are doing the cooking in now.

It is easy to be loose with other people's money but in a lot of ways even if spending $450K is a mistake then you will still have a huge amount of money so you can afford that as long as you have gotten your other spending under control better than it sounded in your last thread.

There is no way that you would want to try to live in the house with that much work being done even if you could. It is likely that any renovation will take a very long time and much longer than any contractors says it might take

In your last thread you said.
Would you consider purchasing a $1.5 million dollar home if you were in our position?

Context
.....home value around $675,000 based off a recent comparable neighborhood sale. If we remain here, we will spend $200,000 in the next 12 months to update the home
Your renovation budget seems to have more than doubled since your post last year.

Did you buy the $1.5 million dollar home and you are renovating that, or are you thinking of spending that much to renovate a $675k home?

If it is the latter then it would likely be better to tear it down and build a new home on the lot.

Keep in mind that in your area a $675k property might be something like a $475K building on a $200K lot, but that varies a lot.

You apparently really like your neighborhood which is why you want to renovate. One option would be to buy a different house in your neighborhood then renovate that or tear it down and rebuild. That would save you from having to move into temporary housing for a year or longer.
Thanks, Watty. I always enjoy your responses.

The architect/designer/contractor claims that their timeline is built in to reflect long lead times for key items. For example, windows being a critical one. They say they'll build the exterior around the existing structure (they best they can) to align with the window delivery. Their timeline has construction beginning in the fall and us out of the house for 2 months in the new year.

I don't know enough to know if this is reasonable.

We didn't buy the more expensive house, but you are correct that our reno numbers jumped way up. The initial was the combination of 1) me not knowing what I'm talking about (oh, it'll be $10k to replace carpet with hardwoods upstairs when in reality it's $20k) and 2) a bit of wishful thinking.

Tearing down existing homes and rebuilding is a trend in our area that's moving away from the city center. We'd be the farthest out by a few miles :). But, something to consider if we do consider that overruns are likely.
exodusNH
Posts: 10352
Joined: Wed Jan 06, 2021 7:21 pm

Re: Bad time for home renovation?

Post by exodusNH »

barneycat wrote: Sun May 22, 2022 11:05 am
HomeStretch wrote: Sun May 22, 2022 8:20 am In “normal” times I would expect a $450k renovation to overrun by at least $100k. In these times of material/labor shortages and price increases, I would expect your project to significantly overrun the budget by >20%, take longer (are you planning to live there while renovating?), and to make compromises on your material choices due to shortages/long delivery lead times. If you go ahead with the reno, consider paying cash rather than financing via a PAL for 3 years to get the spending behind you.

Before you move forward with the reno, consider doing some multi-year projections to identify exactly how you and spouse will reduce portfolio withdrawals to 0-2% through the salary increase you expected per your prior thread, reducing expenses and perhaps your spouse earning a salary.

Between the $450k+ reno cost, your portfolio value being down ($5.2 million now v. $6.1 million a year ago) and increasing your annual portfolio withdrawals from $120k/2% a year ago to $240k/4.68% now, it seems like you are going in the opposite direction. If it takes you 3-5 years to bring your portfolio withdrawals down to 0-2%, assuming no market returns your portfolio balance in 5 years could be reduced by $1.5-$2 million (depending on how much you are contributing to the 401k).

You are in your mid-30s.
- Have you targeted a retirement age and projected how you will achieve it?
- Do you have adequate life and disability coverage if something happens to allow you/your family to continue living in the same manner, pay for college and fully launch 3 kids?
- Is your spouse keeping their professional skills/network up-to-date in case circumstances change?

My sense is from your “stodgy miser” comment and your prior thread that you and spouse may not be on the same page regarding spending and your overall finances. If that’s true, consider sharing this thread with your spouse and including them in the projections process.
Thank you for this post. One clarifying comment: the 2% last year was for school and other spending and didn't include taxes and the investment recoupment - we are doing better than last year and better than the year before. Question for you about over runs:

1. I asked the architect/designer/contractor about overruns. He replied that they can't control material inputs and rates charged by subs, but they've provided "high end" allowance amounts for wiggle room. Do projects always go over? Or, if we just the guy's judgment, expect it to fall around the estimated amount.

Your other points are important to think about. Especially the last comment. My wife and I are directionally correct, but not entirely on the same page. She's reading along here.
Projects always go over. Sometimes it's because once you open things up, you find surprises that have to be dealt with. A big component, though, are customers requesting changes. ("Wouldn't it be nice if XXX..." Bam! Change order.) A 20% overrun would be considered normal. I can't even imagine what you'll run into now. Once you're in the thick of it, it can be very hard to say no.

I know that I spent about 70% more getting my roof redone than I would have in 2019. There were 3 shingle colors available nationwide for GAF, including jet black.

You may need to make a lot of compromises on materials and finishes. For the kind of money you're thinking of spending, I don't think I'd want to feel like I've had to settle.

I would avoid scheduling any major renovation work. Everything it just too unpredictable. Living in a construction zone is very uncomfortable. Current staffing issues will likely be exacerbated by the anticipated fall COVID surge. Materials showing up on time and in the necessary quantities are going to be a challenge, too.

E.g., my SO put in an order for 30 cupcakes for a shower last weekend. The bakery had to cancel her order because they didn't get the supplies they were expecting. While their cupcakes are delicious, there's nothing that goes into them besides sugar, eggs, butter, flour, and flavorings. There aren't custom windows or special granite.

Last summer, we couldn't even get 3 more flat walkway stones for our garden. No one could find people to quarry.
HomeStretch
Posts: 11423
Joined: Thu Dec 27, 2018 2:06 pm

Re: Bad time for home renovation?

Post by HomeStretch »

barneycat wrote: Sun May 22, 2022 11:05 am … I asked the architect/designer/contractor about overruns. He replied that they can't control material inputs and rates charged by subs, but they've provided "high end" allowance amounts for wiggle room. Do projects always go over? Or, if we just the guy's judgment, expect it to fall around the estimated amount. …
If you are using a design and build contractor (who will actually function as the general contractor [GC]), you have a better chance of having adequate allowances as the contractor is likely doing other renovation projects now and has a good idea of current material and labor pricing. But these are crazy times so consider having a good overrun allowance that you mentally build in.

The material costs will be largely dependent on your choices and availability. You could ask for the bathroom and kitchen allowances then head to the appliance, plumbing supply and tile showrooms to see if what you like is covered by the allowances and whether it’s available. Also check prices online. For example, there is a big price difference between a GE combo stove/oven and a Wolf cooktop and double oven. If you go ahead with the project, consider making one of the first steps choosing and ordering all materials to try to have it at the job site at the start so it doesn’t slow the reno timeline.

For our (larger) reno projects, before starting the subs came out to give detailed quotes that encompassed, for example, exactly how many switches/dimmers/outlets/recessed lights we wanted. Once the job started, we went though exact placement keeping in mind furniture design.

Have you considered for the budget:
(1) will you be living in the house during renovations or renting a place? If you do, keep in mind there might be asbestos or lead on disturbed materials, doing dishes in the bathtub gets old, you could be doing takeout for weeks while the kitchen is turn up, etc.
(2) will you be buying new furniture? Renting storage or a POD for current furniture and building supplies while reno is ongoing?
(3) have you included landscape repair or upgrades, if any?

If you are going to do a reno or move, my suggestion is to do it before your kids get too old to enjoy it as a family.
User avatar
Watty
Posts: 28860
Joined: Wed Oct 10, 2007 3:55 pm

Re: Bad time for home renovation?

Post by Watty »

barneycat wrote: Sun May 22, 2022 11:10 am Tearing down existing homes and rebuilding is a trend in our area that's moving away from the city center. We'd be the farthest out by a few miles . But, something to consider if we do consider that overruns are likely.
It would be good to talk to a real estate agent about what might make sense in your area. A big question is how much the house might appraise for after the remodel. If you do not add a lot of square footage during the remodel you may be surprised at how little home equity is added to the house.

I did not reread all of your prior thread but one thing to keep in mind is that even though you got some sort of large inherence there are lots of people like lottery winners, professional athletes, etc that have a lot more money than you do and it is not uncommon for them to overspend and quickly run short of money.

If instead you just sold your house and bought a $1.1 million dollar house that does not need remodeling you would likely have a lot more home equity than if you remodeled. You could be in that house by the end of July and you will have only spent about the same amount of money.

You might even be able to find a house in a good school district where you do not need to send your kids to private schools.
Kaizen Soze
Posts: 351
Joined: Thu Apr 11, 2019 1:47 pm

Re: Bad time for home renovation?

Post by Kaizen Soze »

Times are wild. Our windows and doors have a 32 week lead time and we'll be surprised if they get delivered by 32 weeks.
Other companies collected 50% down payments, ghosted customers, and closed up shop. Poof.
I would be extra cautious who I would do business with right now and how much money I would put upfront.

We decided to move forward with the upgrades because we think prices aren't going to decrease a material amount, but they can continue to increase. The windows and doors are already 25% more expensive today than when we signed in March.
NiceUnparticularMan
Posts: 6103
Joined: Sat Mar 11, 2017 6:51 am

Re: Bad time for home renovation?

Post by NiceUnparticularMan »

Just to give a positive story--we're having a blast renovating our kitchen. Sure, it is more expensive than it would have been in the recent past, and we've had some delays due to vendors. But our builders themselves are great, we are loving the results, and in the end we are not doing this so much as an investment as just something we really enjoy, including the journey itself. Like, at the moment we are not planning to ever build our own house or vacation property, but this is maybe the next best thing, and it is definitely a unique experience.

And the problem with waiting in cases like this is always going to be how long do you have to wait, and how much will things actually improve by then? Like, I am not so sure a lot of costs will go down much, if at all. I think there is a better bet schedules will get shorter, but waiting for a shorter schedule is sort of like something I used to say about leaving for a trip knowing you will hit some traffic slowdowns due to timing--that traffic can be unpleasant while you are in it, but it is not like you will actually get there sooner by leaving later.

Of course this isn't an argument for rushing into anything either. But in the end, live is for living, and money is for spending. So if you have the money and want to spend some of it this way, at least with the right attitude and the right builders, it can be a positive experience.
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