Embarking on the journey of transforming your master bath into a spa-like retreat can be invigorating, but when the topic of finances arises, it doesn't have to induce stress. Discovering the financial landscape for a bathroom remodel can be a manageable task, and we're here to guide you through the steps to maintain fiscal prudence.
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Crunch the Numbers
While the national average cost for an upscale bathroom remodel is around $26,052, your actual expenditure will depend on various factors. Begin by conducting a comprehensive evaluation of your finances, using tools like the National Association of the Remodeling Industry's (NARI) budgeting worksheet. This step will provide clarity on how much you can realistically spend.
Consider the duration of your stay in the home. Everett Collier, president of NARI, suggests a flexible rule: if you plan to stay for five years or less, view improvements as an investment; for a longer stay, prioritize comfort. Assess the impact of the remodel on your home's value, comparing it to neighboring properties to avoid over-improving.
What to Include — And Exclude
When budgeting, allocate for labor, typically around one-third of the project's cost, advises Jeff Cannata, president of Designer's Showcase Kitchens & Baths Inc. Cut non-essential luxuries if needed, such as towel warmers or steam showers.
Create a Buffer
Unforeseen challenges in plumbing can inflate costs, so allocate a contingency fund. Anticipate potential changes mid-project, known as "change orders," and set aside 10% of the labor budget to accommodate them. If not utilized, the surplus can be directed towards additional indulgences post-project completion.
Choosing the Payment Route
Various financing options exist, with home equity loans being a popular choice due to potential tax deductions. Explore alternatives like refinancing, no-equity loans, FHA loans, personal loans, or tapping into retirement plans or life insurance policies. Shop around for favorable interest rates, even if you have cash on hand, as borrowing at a low rate may make more financial sense.
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