Even the best-planned remodeling project can come with a few surprises. Once walls are opened, flooring is removed or old plumbing and electrical systems are exposed, contractors may discover conditions that simply couldn’t be seen during the initial estimate.
That doesn’t mean your remodeling budget has to spiral out of control. The key is planning for the unexpected before construction begins.
How Much Extra Should You Set Aside for a Remodel?
A good rule of thumb is to keep 10% to 20% of your remodeling budget available as a contingency fund.
For a relatively straightforward project in a newer home, you may be comfortable closer to the lower end of that range. If you’re remodeling an older Colorado home, changing the layout significantly or renovating several areas at once, a larger contingency may make sense.
The important thing is to treat that money as a reserve, not as part of the original project budget.
If you have $100,000 available for a remodel, for example, it may be smarter to design an $85,000 to $90,000 project and keep the remainder available for unforeseen conditions rather than designing right up to the full $100,000.
What Unexpected Costs Come Up During Remodeling?
Many remodeling surprises are hidden behind the finishes you see every day. A room may look perfectly normal while concealing problems that aren’t obvious until demolition begins.
Common discoveries can include:
- Outdated or unsafe electrical wiring
- Plumbing that needs repair or replacement
- Water damage or hidden leaks
- Mold or moisture problems
- Rot or structural damage
- Uneven or damaged subfloors
- Previous remodeling work that wasn’t done correctly
- Framing that needs modification
- Insulation deficiencies
- Building code issues that must be corrected
Older homes can be especially unpredictable because they may have gone through several renovations over the decades. What looks like one wall from the outside can contain several generations of somebody else’s creative decisions.
Changes Aren’t the Same as Unexpected Costs
There’s another major source of remodeling budget increases that homeowners sometimes lump into the “unexpected” category: changing the project after construction begins.
That’s different.
If demolition reveals damaged framing that couldn’t reasonably have been discovered beforehand, that’s an unforeseen condition. If you decide halfway through the project that you want different cabinets, additional lighting and a larger kitchen island, those are changes to the original scope.
Both affect the final cost, but understanding the difference makes it much easier to keep track of where your remodeling dollars are going.
Older Colorado Homes May Need a Larger Cushion
The age and history of your home should influence your contingency budget.
An older home in the Denver area may have outdated wiring, older plumbing, previous additions or renovations completed under very different building standards. Sometimes previous work was completed without permits or simply wasn’t constructed correctly.
A good contractor can identify many potential problems during the planning process, but nobody can see through walls. That’s exactly why a contingency fund is important.
Can a Contractor Prevent Unexpected Remodeling Costs?
Not entirely, but careful planning can significantly reduce them.
Before construction begins, your contractor should take the time to understand the existing home, clearly define the scope of work and identify areas where additional investigation may be worthwhile.
The more decisions you make before construction starts, the fewer expensive decisions you’ll have to make while crews are already working.
A detailed proposal also matters. You should understand what is included, what isn’t included and how unforeseen work or requested changes will be handled.
Don’t Automatically Spend Your Contingency Fund
One of the easiest budgeting mistakes is mentally spending the contingency money before the project begins.
You start with an extra $15,000 reserved for surprises. Then you see upgraded countertops. Better appliances look tempting. Maybe those custom cabinets aren’t that much more.
Suddenly your contingency fund has disappeared before demolition even starts.
Keep that money untouched until you know you don’t need it. If the project goes smoothly, you can always use some of the remaining budget for upgrades near the end or simply keep the savings.
What Happens When a Contractor Finds a Problem?
Communication is critical.
If unexpected work is discovered, your contractor should be able to explain what was found, why it needs to be addressed and how it affects the project cost and schedule. Significant changes should be documented so you understand what you’re approving before additional work proceeds.
You shouldn’t be surprised by a major additional charge at the end of the project that was never discussed with you.
A Better Remodeling Budget Includes Breathing Room
The goal isn’t to assume something will go wrong. It’s to make sure that if something unexpected does appear, it doesn’t derail the entire project.
Building a 10% to 20% contingency into your financial planning gives you room to make good decisions instead of being forced into the cheapest possible solution because the original budget has already been exhausted.
And if you don’t need it? That’s the best kind of remodeling surprise.
Planning a Remodel in the Denver Area?
Accell Construction works with Colorado homeowners on kitchen remodeling, bathroom remodeling, basement finishing, whole-home renovations and custom construction projects.
Careful planning at the beginning of a project can help establish a realistic budget, identify potential challenges and reduce expensive surprises once construction begins.
If you’re considering a remodeling project in the Denver area, contact Accell Construction to discuss your project and start building a realistic plan and budget.
