Renovation Timetable: Keeping the Construction Phase Shorter

Here are some ways to decrease the length of time your renovation is actively under construction, through effective preparation:

• Be fully prepared and highly detailed in design plans before beginning construction.
• Have all necessary permit applications filed and permits issued in advance.
• Be aware of potential building code issues. Discuss potential problems in advance with building inspectors.
• Have financing fully secured before beginning, including an emergency fund of at least 30% of the budget in case of problems encountered during the process.
• Order items far enough in advance that they will be available on site by the time they are needed for construction, even if they come in as much as 50% later than promised by vendors.
• Have your temporary housing lined up before construction begins, if applicable, and make sure it is available for as much as twice the scheduled construction duration in case of emergency. If temporary housing is not slated to be used, try to line up emergency backup temporary housing in case of severe unexpected issues during construction, particularly for a big job.

If length of construction phase is really vital to you, you can also design for efficiency of construction. Clearly these options can be limiting, and may not be appropriate for your project.

• Avoid additions, particularly ones that require a foundation. Consider going up rather than out.
• Avoid taking out walls, particularly load-bearing walls.
• Avoid relocating plumbing fixtures, gas fixtures, or high-load electrical appliances.
• Consider finishes for floors that allow for speed of installation, such as sheet linoleum or vinyl, wall to wall carpet, and floating pre-finished flooring (such as wood, bamboo, or cork).
• Avoid custom cabinetry and other custom made items that require long lead times or long construction periods, in favor of stock and semi-stock items.

Finally, sometimes - but definitely not always- construction schedules can be speeded up by throwing more money at a problem. If you're paying for temporary housing and numerous unforeseen problems create delays that become a hardship, consider asking your contractor how much more it would cost to get more workers onsite to speed things up.

Renovation Timetable: The Construction Phase

The construction phase will vary with the size and complexity of the project, and can be extended by difficulties uncovered during construction, by indecision, or by change orders. Most projects will last from two months to one year.

Here are some general guidelines:

• Kitchen renovation: Two to six months (many are three to four)
• Bathroom renovation: Two weeks to four months
• Partial overall renovation including kitchen and partial bath, with some other areas: Three to eight months
• Total renovation: Six months to over one year

Renovation Timeline: The Design Phase

If you are working with a design professional, you can expect the design phase on most projects to run six weeks to six months, depending upon your decision making and communications style, and on the size and complexity of the project. Some very small and simple projects might be designed in as little as two weeks, if they fit well into the designer's schedule. Some very large or complex projects, or projects in which you are really unsure of what you want or in which you may change your mind a lot, may take as long as a year - or more. When working with an architect (and often also an interior designer and/or a kitchen and bath designer) to design a new construction house being custom-built for you, a year is a very common timeline for the design phase.

If you are designing your project on your own, you should give yourself from six months to two years to plan most projects, depending upon how large or complex the project is, how much time you have to devote to the project, your decision making style, your current level of knowledge about construction techniques, products and materials, and your affinity for the subject.

How long will it take?

Two project phases

The average renovation can be divided into two primary phases, the design phase, and the construction phase. Failure to allot adequate time to the design phase can result in more time being added during the construction phase, when it can be more expensive and troublesome. To get the best results from your renovation, you should plan out the design to a very detailed level before breaking ground on construction. You may still have to change the design around problems or technical issues uncovered during construction, however.

This timeline assumes that you are hiring contractors to do much or all of the work. If you are doing most or all the work yourself, you may have a continuous, intermingled design and construction phase. In that case the situation becomes much more complicated, and in most cases some sections of the project will still have to be fully designed before construction can begin on those sections, particularly when they involve bringing in subcontracters to help with certain technical aspects of the project.

Breathing room

In most cases, you should plan on a cushion of time or delay between the end of the design phase and the beginning of the construction phase. This could be as little as a few weeks, or as long as six months. Again, this will depend on many factors including your relationship with your contractor, your financing situation, the size of the project, how well the schedule has been planned out in advance, permitting and related issues, etc.

What are all the costs of moving?

The hidden costs of moving

When considering the choice between renovating and moving, it's helpful to compare the costs for the two options. According to Liz Pulliam Weston of MSN money, selling your home, and buying and moving to a new home costs approximately 10% of your home's value. Of course, this is just a rough average estimate, and your costs may be higher or lower. For moving, many of the costs may be initially hidden, or easy to forget. So be sure to consider, and try to calculate, costs for moving including the following areas:

• packing supplies and moving companies
• realtor and legal fees
• points and fees on new mortgages
• increased cost for homeowners' insurance due to more expensive home or location
  
• increased cost for car insurance due to location differential
• school fees if you change districts and pay for kids to attend the old district, or opt for private school for the first time
  
• increased costs for fuel and auto maintenance if your work commute or commute of children to school or activities lengthens
• condo association fees if you move to a condo or to a more expensive condo association
• property tax increases due to a more valuable home or more costly town
• unexpected maintenance or required renovation on your new home
• the new furniture and accessories you're likely to buy for your new home (particularly if it is larger or in a different style than your old one)
• paint and window treatments you're likely to buy for your new home

There may be some situations which would involve some reduced costs of living for you once your move is complete. If any of these apply to you, don't forget to factor these reductions in after you've added the costs of moving.

• reduced mortgage cost if downsizing
  
• reduced cost for homeowners' insurance due to less expensive home or location
  
• reduced cost for car insurance due to location differential
• reduced fuel and auto maintenance costs if shortening commutes
  
• reduced property taxes if downsizing or moving to a less expensive town
  
• reduced condo fees if a smaller condo or less expensive condo association
• reduced school cost if moving to a town with better public schools which would cause you to transfer from current private school options
  

Should I renovate or not?

Renovate, move, or do nothing?

There are many factors involved in your decision to renovate vs. moving to or building a new home vs. doing nothing. Some factors are emotional and some are financial. No one can really tell you what is the best choice for you, but here are some issues you may want to consider. This decision, of whether to renovate, is of course inextricably linked with, but nevertheless separate from, the question of how much to spend on a renovation project. That issue will be addressed in several future posts.


Factors to consider
-many of these questions will be treated more fully in subsequent posts-

• How much do you like the current location of your home (your neighborhood, town, etc.)?
• What would be the consequences of moving, both good and bad (your commute, children's schools, living farther from or closer to friends and relatives, etc.)?
• What is the aesthetic or historic value to you and to society of your current home?
• What are all the costs of moving?
• What are your emotional ties to your current home?
• Is your home equal to, below, or higher than neighborhood standards relating to newness and style of features in kitchen and bath, square footage, and maintenance/degradation?
• How soon would you be thinking of moving from your current home, after a renovation?
• What would be the cost of renovating?
• What would be the equity gain/assessed value of your home after renovating?
• What is it you're really looking to achieve in a renovation, and is it something that is even likely to be found in the marketplace (by moving)?
  
  
  
  
  

Paying for a renovation: Mortgages

Many people pay for their renovation by taking out a home equity loan (second mortgage), home equity line of credit, or by refinancing their principle mortgage with cash-out option. You can get a lot of free information about the pros and cons of each of these options by talking with your banker or mortgage broker. You should expect to talk with more than one person about these options, because some brokers or bankers will steer you toward the option that generates the highest commission for themselves, or towards the products that they sell instead of others they cannot offer. Clearly, such options might not actually be the best for you. So don't just do what the first person suggests. Some questions you may want to ask yourself or your financial advisor, banker, or broker include the following:

• Which product will gain me the biggest tax deduction?
• Which option will cost me less in points, refinancing my primary mortgage, or taking on a home equity second mortgage or line of credit?
• Which option will cost me less in lifetime interest?
• If interest rates are lower now than when you originally or last financed, this will probably be an overall refinance, if interest rates are higher now than when you originally or last financed, this will probably be a home equity loan or line of credit.
• Do I know how much my renovation will cost?
• If the answer is no, a home equity line of credit with a maximum equal to the maximum cost of your renovation may be a better answer. If the answer is yes, a second mortgage may be the best answer. Of course, you should develop as strong an idea as possible of the cost of your renovation before you finalize financing.
• Which option will expose me to greater risk if I cannot pay my loan, and do I have the ability to withstand that risk?
• Usually, a cash out refinance exposes you to greater risk than a second mortgage or a home equity line of credit.
• Will either of these options expose me to the need for PMI, and if so, how much will that add to my costs, and are there any benefits to me of getting PMI?
• Usually, PMI primarily benefits the mortgage company, in other words, the bank, not you.

In a subsequent post I will discuss the issues of deciding whether to renovate at all, and the costs of not renovating, or of renovating in certain situations where it may be contraindicated.

How can I pay for my renovation?

Which money to use?

If you have a short or medium term savings pool lying around, clearly this may be the best way to pay for your renovation project. However, failure to have this type of pool of funds should rarely bar you from contemplating a renovation project. You probably have several other options.


Retirement savings

Many people pay for their renovation project by taking disbursements from their retirement accounts. Whether this makes sense for you will depend on a number of factors, but you might ask yourself the following questions:

• Will I pay a penalty (in taxes or to the holder of my account) for taking out some of this money now?
• If I will pay a penalty for taking the money out, can I 'lend' myself the money instead?
• Ask your financial advisor or account holder about this.
• Will the equity I gain in my home equal or exceed the cost to my retirement account?
• Will the interest (and fees) I save in not taking out a loan to finance the renovation equal or exceed the interest (and fees) I will lose by removing some of my retirement money?

How much does it cost: Kitchen?

Cost as a function of location

This is the second in a series of articles about average renovation costs. These are based upon renovations within the greater Boston metropolitan area. Your costs may vary with your location. Specifically expect costs in the New York City area and in major cities in California to equal or exceed these costs; in much of the rest of the U.S. costs may be lower. For more details on these issues, see the previous article entitled "How much does it cost: Bathroom?"

Cost as a function of purpose

This article, and this blog as a whole, is primarily concerned with renovations to owner-occupied (or temporarily vacated for the renovation or soon to be occupied) primary or vacation homes. Renovating, constructing, or condo-converting residential units primarily for the purposes of profit are a secondary consideration which may be mentioned here occasionally, but tend to have specific requirements in order to maximize profit and are not fully treated here. From time to time we may treat this issue in a specific article devoted to the topic. However it's safe to say that except in the highest end of market locations, costs in properties designed specifically for profit should usually be 10% to 40% or more lower than for owner occupied residences for profit conservation and many other reasons.

Cost as a function of scope of work

This article and much of this blog is primarily concerned with total renovations to the area in question, rather than primarily cosmetic changes such as paint and decorative finishes or targeted small changes. Small cosmetic changes may occasionally be mentioned, or treated in a longer article. However, even within a full renovation, the range of scope of work can be considerable. From replacing all items in place, to moving plumbing, gas, electrical, heating, windows, etc, to removing load-bearing or non load-bearing walls, to building an addition to house an entirely new kitchen- costs start at a low end for less changes and go up to a high end when adding square footage and foundations.

Average costs

High End
In the greater Boston area, particularly in higher end homes, a $100,000 kitchen renovation has become the norm, even without an addition to the structure of the home. Professional grade appliances and custom cabinetry drive much of this cost, with stone or solid surface countertops and flooring accounting for the middle of the product budget, and lighting and decorative and finish details bringing up the balance. Labor accounts for half or greater of the total budget of a renovation project. In general, the lower the project's budget, the greater the percentage of the budget will be dedicated to labor. In a very low budget project, labor may account for 80% of a budget, in one in the middle range, 60-70%, and in a high end project, it may account for approx. 50% of an average budget.

The days of the $200,000 to $300,000 kitchen are definitely upon us as well, though currently still less common. Such budgets often involve an addition, a great deal of custom cabinetry, specialty custom features such as large unusual range hoods or window units; and may have other features less commonly found in kitchens, such as fireplaces or wood stoves, home office alcoves, home automation functions, or specialty areas for children or geared toward entertaining. In these very high end kitchens, the owners may have features specially designed for their unique tastes or needs, the highest quality of material and craft are found, and long term needs and durability are usually a major consideration.

Mid-range
In the middle range, it is still very possible for many homeowners to have a kitchen designed that satisfies their needs and desires, while spending in the range of $60-80,000. Such kitchens usually will not involve an addition to the structure of the house, but may still incorporate an internal structural change such as removal of some non load-bearing or limited amounts of load-bearing wall. They may still have some custom cabinetry, but utilizing less expensive woods or construction techniques. They may still have some stone or solid surface countertops, but carefully chosen for cost and perhaps integrated with some less expensive countertop materials (such as tile or some wood) in some areas or in reduced quantity. Their appliances will probably be in the highest tier of consumer grade appliances, as opposed to chef grade appliances. In general, this price range can still allow for a high quality, durable, and beautiful product if designed with care to maximize the available budget. Some tradeoffs may have to be made in some areas, such as loading the budget toward the cabinets and saving in another area that can more easily be replaced at a later time, such as flooring or countertops.

Lower Budget
When working with a very tight budget, homeowners can still achieve a beautiful kitchen of reasonably high quality and durability, through extreme care in design and product selection. Depending upon the scope of work required and the willingness of the homeowner to give up some features and materials, a kitchen may be constructed in this range from $30,000 to $50,000. With such a budget the greatest percentage of cost will be devoted to labor, and designs which minimize the labor needs will be of greatest importance, such as avoiding where possible the relocation or removal of walls, and avoiding relocating many plumbing and gas lines. Most products will be semi-stock rather than custom, woods will be less expensive, veneers will be emphasized over solid woods. Unless countertop areas are very small they will probably be laminate, tile, or some woods, but in some cases solid surface or stone materials may still be able to fit into the budget. Appliances will be midrange consumer grade but can still be very attractive if chosen carefully, and should still be expected to last for five or more years and then may need to be replaced at some point. Some homeowners can maximize their budget by doing some aspects themselves, such as painting, some demolition, or some flooring.

Very Low Budget
Homeowners who expect to pay $20,000 or less should be those who have the skills, patience, and time to do much of the work themselves, or who are dealing with an extremely small space that requires little or no relocation of gas or plumbing lines or walls. They should expect to use the lowest cost products in most or all categories. This will include stock or semi stock cabinetry in the least expensive woods, emphasizing veneers and particleboards, or laminates. Countertops will be in the lower cost grades of laminates or tile. Floors will be sheet vinyl or the least expensive tile or laminate flooring, and appliances will be mid to low consumer grade.

Over the next two weeks this article will be updated with some additional information on the topic, such as the following:

• How to determine a budget.
• Budget of a kitchen as a function of home's value.
• ROI on resale.
• Durability and maintenance.
• Typical cost ranges of some products.

Feel free to comment with any questions you'd like addressed in this or future articles on kitchen renovation or other renovation topics.

How much does it cost: Bathroom?

Cost drivers

This is the first in a series of posts about average renovation costs. These are based upon renovations within the greater Boston metropolitan area. Your costs may vary based upon your location. Specifically expect costs in the New York area and in major cities in California to equal or exceed these costs; in the rest of the U.S. costs may be lower. This is due in large part to different costs of living in various areas which affect labor costs, and different real estate prices which affect materials costs. In areas of labor shortages costs will also rise, sometimes dramatically, and construction times may increase as well, or alternately construction times may decrease, depending in large part upon the size of your contracting firm.

In renovating a bathroom, some factors which regulate costs include the size of the room, how much system or structural work can be preserved (pipes, etc.), what kind of bathing/showering structure is there and whether it will be changed, whether an addition is involved, whether you are taking out any walls, and the level of luxury you are going for. In addition, this article is primarily concerned with residential bathrooms in owner-occupied homes, rather than in properties being developed exclusively for sale. Clearly when profit is the major concern design and budgeting are planned differently, resulting in lower costs in most developments (houses and condos at the extreme high end will still have budgets in the middle to high range of those listed here).

Reducing Costs

Some things you can do to reduce or keep costs down, which of course may not be possible or desirable for you, include the following:

• Avoid removing walls or adding to the size of the room.
• Avoid additions, especially that involve foundations (consider going up rather than out if adding a new bathroom).
• Avoid taking out the tub, but concentrate on changing the tile and faucetry and if needed, recoating the tub to change its color or make it like new again.
• Avoid changing from a bathtub to a walk-in shower or vice versa.
• Avoid changing the location of plumbing fixtures and drains, particularly the toilet.
• Avoid changing the location of the vent fan, or changing the size or location of windows.
• Avoid the use of custom or handmade components.
• Look for stock items at major retailers rather than special order items at small specialty retailers.
• Keep the porcelains white, and the metals chrome or brushed nickel.
• Use larger tiles in simple patterns to reduce tile labor costs.
• Work with your designer or plumbing contractor to locate fixtures (in a new bath or when changing fixture locations) to reduce plumbing labor costs by making piping more efficient.
• Avoid unneeded multiple electrical components to reduce electrical labor costs.
• Avoid change orders; make almost all decisions before beginning construction.

So what's it cost?

The cost of the average bathroom will range from $6,000 to $60,000. Many small bathrooms will run between $20,000 and $30,000; medium sized rooms tend towards $30,000 to $60,000; some larger bathrooms will extend to $80,000 and up. Many half baths/power rooms will run from $3,000 to $16,000. Such a wide price range reflects the extreme variety of products on the market today, from a very low end to a luxuriously high end. It also reflects the extreme variations of work to be done, from replacing a few items in place, to knocking out walls and sections of walls, enlarging a room, changing locations of and types of fixtures or adding new fixtures, etc.

When to spend more

Other than pure aesthetics, there are many reasons to avoid spending at the bottom of the market when renovating, particularly within a bathroom project. You will need to decide what works for your family, your lifestyle, and your resale plans.

Resale Issues

According to Remodeling Magazine (as reported in Realty Times), the return on investment for a bathroom remodel at resale ranges from 60% to 151%, depending upon your location. Luxury bathroom remodels, which include such features as adding to the bathroom's footprint, doubling windows, adding double sinks, separating bathing and showering features, and adding partitioned toilet areas, tended to generate higher ROIs in some markets than standard renovations.

How this plays out in your home can depend upon home sale factors in your region, city, and even neighborhood; upon how old and in what condition the existing bathroom is found; and what competing homes on the market are doing (market standards). If this is a concern for you, you may want to discuss these issues with a good Realtor who is familiar with your region and your surrounding area (even neighborhood). Another consideration aside from strictly resale price is time on market. If your home has bathrooms below or significantly below market standards, particularly in a market with fairly high numbers of homes available, that may mean a longer time on the market when you are ready to, or need to, sell. This situation can be stressful and can lead to additional expense in mortgage carry costs, alternative living situation costs, etc; these possible costs ought to be factored into your ROI calculations in some way.

Author Robert Irwin, in his book Improve the Value of Your Home up to $100,000, recommends that a bathroom be valued at approximately 5% of a home's value when designing specifically for resale ROI. In a home valued at $500,000, that would mean a bathroom costing approximately $25,000; in a home valued at $1.5 million, that would mean approximately $75,000 for a bathroom. However it must be said that with your market standards, or in a tough selling market, your bathroom might need to be valued more highly to push you over the edge for buyers. Conversely in a hot sellers market, you may be able to spend much less.

Economist David McPherson, applying econometrics to a sample of 29,000 sales, came up with an even higher estimate of a bathroom's value as a percentage of home value: 24% (as quoted in the Washington Post and Marginal Revolution). It is unclear in this study if he is referring to the cumulative value of all bathrooms, rather than the individual value of each bathroom as Robert Irwin references, but it seems likely to be a cumulative figure. Clearly if the bathroom is worth almost a quarter of the home, a substandard or below market standard bathroom would really be an expensive proposition. McPherson's study also claimed that if a home is in 'fixer-upper' status, it results in an almost 25% loss of resale value.

Lifestyle

Clearly there are other factors that may be equally important in deciding how to budget your bathroom renovation than merely resale value. Renovation is a spending choice as much or more than an investment: it's just one of the many ways you can spend your money, and only you can decide if you should spend it that way and if so, how much you should spend on a project.

For many homeowners, buying a nicer bathroom is more worthwhile than having more vacations or spa retreats, or might even save them money in the long run if aspects of the home feel like a spa retreat, inspiring them to cut back on some recurring spending on such ephemerals. For other homeowners, another trip to the amusement park beats the amusement value of specialty plumbing fixtures. For people who can afford it, however, they will spend a certain amount of their income on one thing or another, and putting that income into the place they spend so much of daily life, the home, is more worthwhile than more expenditures on travel, fashion, dining out, or other entertainment. If you can successfully channel some of your existing spending in another direction for a few years, that may be one way to justify your choice of a little extra for that handmade tile or the waterfall faucetry.

Family

For many homeowners, the value of having either a separate bathroom, or separate areas within a larger bath, customized to the needs or preference of each partner, or of adults and children, is an incentive for a budget increase. While his and hers sinks have been popular for a while, the trend, particularly in more valuable homes, is moving towards his and hers bathrooms, or at least his style of shower and her style of bath. Master bathrooms have become more and more integrated into luxurious master suites in higher end homes for several years, but adding a bathroom dedicated to the children has become equally common in such homes and perhaps even more common in mid-range priced homes as well.

With so many products and styles to choose from, it's now possible to give each partner or adults and children customized spaces that make their daily routines more efficient or more pleasant. Adults can use steam showers, body sprays, or new air baths to wind down after a hard day. Young children can now have plumbing fixtures sized right for them.

Durability

Investing in more durable materials and components in the bathroom can keep your renovation looking and functioning like new for many more years. This is particularly relevant if resale is a concern, but not likely to happen for several years down the road. Since labor is often at least a somewhat larger slice of a renovation budget than materials and products (the lower the budget, the more likely labor will be the major component), installing lower quality materials to cut costs now will lose significantly more than gain over the long term if they have to be replaced in the future, or if they look bad upon resale.

Range in quality, aesthetics, and cost

The following is a rough guide to follow if you are looking for products in the low, middle, or high end of the luxury/cost (and often durability) spectrum. As always, a more expensive decision in one area can often be accommodated in a budget by cost cutting in another. Sample prices are for comparison only; you may find some items for less or more than these. Sample prices refer only to the cost of products/materials; labor is additional, and more complicated products will have correspondingly higher labor costs.

Bathing:

• Low: Acrylic, Fiberglas, or enamel on steel tubs; smaller and shallower tubs. ($200-400)
• Medium: porcelain on cast iron tubs, acrylic lower end jetted baths; medium sized and somewhat deeper tubs. ($600 to $4000)
• High: porcelain on cast iron and some acrylic higher end jetted or air baths; waterfall, specialty soaking tubs; unusual materials such as glass or metal tubs; longer and deeper two person tubs. ($5000 to $20,000)

Showering:

• Low: Shower and bath integrated in one unit with curtain or stock glass door; single shower head or perhaps with handshower. ($600 to $1500)
• Medium: Separate small walk-in shower with stock or semi stock glass door, at least separate handshower and showerhead; perhaps a small bench or shelf; perhaps additional heads such as body sprays. ($2000 to $4000)
• High: Larger two person walk in shower with custom glass door or open with floor drain outside; features such as glass block, larger benches and storage shelves; multiple heads and body sprays, unique features such as waterfall showers, steam. ($5000 to $15,000).

More product price ranges will be added in the coming days.