Making renovation budgets

     For today’s topic, we are going to discuss home inspections as it pertains to budgeting for a home or planning home expenses.  A home inspection is an excellent tool to use to help in budgeting for your home.  Every home should have a 5 and 10-year plan on what you are planning to do so you can budget accordingly.  You want to know what you are planning and what you want to do to the home.  Whether it is going to be building a deck, refinishing the kitchen and/or finishing the basement.  You don’t want to do all this at once, it will create headaches not just for the monetary reasons but for peace of mind.  You want to pace the big projects out so you can have some enjoyment between the projects.  The home inspection is where you should start.  With the report in hand you can see a list that can set priorities and other minor repairs that need to be doing and can help you decide how much money you should set aside.

 

     Let us say you want to build a nice 16’x20′ deck with seating and railings.  That might cost you 10 thousand dollars.  You also want to finish the basement, that would run approx.  20 to 30 thousand dollars.  Then there is the kitchen that you want to refinish that would run again 20 to 30 thousand dollars.  Add that up and that could be 70 thousand dollars before everything is finished, that sounds like a lot of dough because it is.  But if you are planning a 10-year plan that would be 7 grand a year, a little more manageable.  So, with the first project being the deck could be in year 2 or 3.  The deck we said would be around 10 thousand dollars and let us go with 3 years you would have socked away 21 thousand dollars leaving you with 11 thousand dollars in the budget.  That would mean in year 7 you can finish the kitchen.  The kitchen would set you back, let us quote in the middle, 25 thousand dollars.  In year 7 you would have save 39 thousand dollars, so after the kitchen you would have 14 thousand dollars left in the budget.  That would mean in year 10 you would have 35 thousand dollars to finish the basement.

 

     You are asking how would the home inspection report help in this.  Well the report would place other priorities in the mix, like a new roof.  It would list any repairs that will be required to keep the home in a good shape.  With the report in hand you can now plan a little easier than without it.  If you don’t do an inspection before you start to do your 5 and 10-year plan then you will be blindsided by other projects or repairs that will be need attention.  One way is to budget a little more every year but having the report in hand will take some of the guess work out.  For example, the budget above had you put 7 thousand dollars away a year, by putting another thousand dollars in an emergency fund there would be some cushioning in there.  Just think in 10 years if you planned everything and you knew what the priorities were coming you can have another 10 thousand dollars to spend on what you want.  That is a nice vacation somewhere.  Remember a  home inspection helps to uncover hidden surprises.