Budgeting for home improvements or additions

A recent study by Qualified Remodeler magazine concluded that three out of four homeowners have gone into higher debt financing a home remodeling project as it went over budget. This is according to multiple real estate companies and financing institutions noting increased credit requests. In a survey of over 3,462 homeowner renovations, 78% had gone over budget, many had exceeded their budget by at least $5,000 and 35% had exceeded their budget by at least $10,000. The other half of the equation is the extended construction time, with 58% of those noting construction took nearly 30% longer to complete. In remodeling and renovation projects, I’m not surprised.

An important milestone in determining if a remodeling is practical is the age of the last renovation, if there was one. As a general rule, 16-20 years is the life expectancy of a remodel. As the finishes fade and sustainability becomes more requested, the desire to catch up with the latest looks, materials and appearances starts to become apparent. The appetite to renovate one’s home, is greater among younger households who are more media savvy and aware of latest trends. Older homeowners tend to “get-by” until they come to realize that their ancient closed-in kitchen needs to be reevaluated. Fifty-eight percent of renovations are by homeowners under 50 and 42% are by over 50-year-olds.

Let’s forget the statistics and look at the reality. Anytime you want to remodel an existing house, opening a wall is opening history. Things were done differently than compared to today’s rigorous standards. Or they weren’t done at all.

My theory is: houses built in California before World War II were reasonably well-built with primitive but viable mechanical systems and construction techniques. Houses built before between 1950 and 1975 were poorly built and expected to be replaced. After ’75, residential construction improved significantly. I only have to look at a few house components to date a house, such as windows — even if replaced — foundations and roof components. It’s like CSI, crime scene investigation.

In California, renovations can run $300 a square foot for a minor renovation without plumbing or major electrical, $400 a square foot for a simple renovation or an ADU, and $500 a square foot for a reasonably straight-forward renovation assuming there is good soil and minimal site elevation changes. Utility hookups or their upsizing can significantly affect the outcome. These are very generalized numbers. About as valuable as using an Ouija Board when it comes to costing a project.

With all renovation projects, you open the wall and there’s a surprise. One renovation I was involved in, they opened the walls to find that there had been a significant fire and the studs were charred and had to be totally replaced. Whenever possible, prior to the actual construction starting, a homeowner, or a handyman, should open some walls, ceiling and look under the floor to see what’s there. After photographing and noting what’s inside, repatching is easy. It’s better to do any investigation of walls by opening them from the inside through sheetrock, rather than from the outside through stucco or wood.

What’s important is having good quality plans and talking to well recommended contractors to get the best overall review. I always say, talk to five contractors, have three bids and choose one for the construction. Many clients come to me with a contractor in hand, sometimes very well qualified, and sometimes it’s their Uncle Luigi with a truck, a boombox and a dog. Good luck!

When looking at a contract with a contractor or subcontractor, make sure they also give you a price for additional work and whatever administrative cost may occur. Be careful of how they price their costs. Make sure they’re local. When the firestorms devastated homes, we dealt with many insurance companies that would come back with a 10-page budget, highly detailed, using prices from Third World countries or Kansas, always way below our actual statewide cost. Thus, the total budgets would be incredibly low and impossible to fulfill.

So, I’ve asked this before but no answer: why are kitchens getting humongous and people cooking less? Why have a huge kitchen islands, only to eat your DoorDash delivery on it? Go figure.

I was asked as a follow-up to one of my past articles: What’s going on with the silicon dust industry problem?

In October, I noted that the popular cultured-stone countertop material, essentially plastic not stone, was causing lung cancer, disabilities and death to shop workers sanding the manufactured product without proper ventilation or protection. Workers have brought law-suits against multiple Southern California companies and won big. The so-called engineered stone manufacturers in Los Angeles were hit with a $52.4 million judgment awarding damages to silicone-stricken workers where facilities were inappropriately ventilating and lacked protection for their workers, leading to numerous deaths and life disabilities. This will go on for a while before actual settlement but in the meantime factory safety and ventilation systems are being installed throughout.

When you remodel your kitchen, ask where your preferred counter material comes from and if they have proper ventilation and safety for their workers. Always ask for sources.