Where Is the Smartest Place to Put Your Remodeling Dollars in Your Connecticut Home?

If you love your home and your neighborhood—but feel like your home doesn’t quite fit your lifestyle or your tastes—remodeling your home may be the smart move for you. But where should you put your money if you choose to remodel? 

Not every remodeling project pays the same kind of dividend down the road, when you finally decide to sell your home.  Which ones will pay off? Here’s a quick overview of some of the projects that pay the best return on investment in the long run. The figures shown here are 2008-2009 national averages, so you may see some variation. But they will help you to get an idea of which projects make the most sense. 

Of course not everything comes down to dollars and cents when you’re remodeling. Ultimately, you’ll want to choose the projects that make your home as comfortable and enjoyable as possible. Still, it’s still helpful to know relative costs and what will pay the most dividends when it’s time to sell. 

If you’d like to take a more detailed look at which projects will give you the best return on your investment in the Connecticut area (and check out industry trends over the last few years), we invite you to download our free 12-page report: Top 10 Remodeling Projects That Hold Value on Resale. 

Renovation Costs in Connecticut: What Will That Remodeling Project Cost You?

Maybe you’ve been thinking about remodeling your home in Meridian, Middletown, or Wallingford because you need a little extra space—or because the space you have just doesn’t fit your lifestyle anymore. Or maybe you just want to update your home with a fresh new look. If you’re like most homeowners, however, you probably want to get some kind of idea of what that remodeling project is going to cost you before you get too far into specific plans.

We’ve been building and remodeling homes in Connecticut since 1985, and the question of “what’s this going to cost?” has always been one that we here more than any other question—whether it’s asked about a new custom home or a remodeling project. The answer to that question, of course depends on what you want done, what kind of materials you want to use. And in the case of remodeling, your builder may run into some pre-existing issues that aren’t apparent on the surface.

Still, it’s helpful to have a general idea of what to expect for different kinds of renovation or remodeling projects. Here are eight common remodeling projects for upscale homes and what they generally cost in the Middle Atlantic region. We’re also including what you can expect to recoup at resale so you can get an idea of which projects pay you the best return on your investment.

PROJECT	COST	RESALE VALUE	% RECOUPED
Bathroom Addition	$80,596	$37,319	46.3%
Bathroom Remodel	$55,029	$27,877	50.7%
Major Kitchen Remodel	$114,041	$62,871	55.1%
Master Suite Addition	$236, 917	$112,033	47.3%
Garage Addition	$90,995	$43,296	47.6%
Composite Deck Addition	$38,872	$19,530	50.2%
Replace Wood Windows	$19,787	$11,217	56.7%
Replace Vinyl Windows	$15,116	$9,167	60.6%

Bear in mind that these costs are an average for upscale homes in the overall Middle Atlantic region. Your specific costs may vary significantly from these figures depending on the size of your home and the complexity of the project. Any reputable builder will want to meet with you first to nail down exactly what you want first. These numbers do, however give you a sense of relative cost for different projects—and they are a pretty good indicator of which projects bring you the most “bang for your buck” when it’s time to sell.

Shoot us a note about your remodeling ideas and questions. We’d be happy to help you with a project that makes sense for you!

Custom Homes In Connecticut: Eliminating “Scope Creep”

Building a custom home in Connecticut is an exciting proposition. But there is some excitement that you can do without. You may have heard or read about custom building projects that spin out of control—blowing the budget out of the water and missing the completion deadline by weeks, or even months. That’s the kind of excitement that homeowners (and builders) would rather not have.

And yet, it happens all the time. How in the world do so many custom-building projects cost more than budgeted—and take so long to complete?

It’s true that there are a lot of “moving parts” in building a custom home. There can be circumstances that are beyond anyone’s control. Sometimes shortages can drive material costs up unexpectedly. And those shortages can also cause delays. Every now and then, builders run into things that are just more difficult than expected. There’s not much anybody can do about those things. But there’s another cause of budget and deadline busting that can be controlled. We builders refer to it as “scope creep.” It can destroy your budget and make a joke out of your deadline.

Scope creep occurs when a homeowner starts adding “small” items to the already agreed-upon contractor with the builder. It often begins as a small and seemingly benign request: “Can we move that kitchen wall just eight inches to the right?” Ah, but it doesn’t end there. Because moving that wall may mean a change in the plumbing plans. And by moving the wall, you may also need to move a window or a door. And if that affects the light in the kitchen, you may decide to put in a skylight to keep things bright.

You get the picture. The homeowner starts with what appears to be a small change. But that small change—even though it happens in small increments—ends up changing the scope of the project significantly. It drives the price up and it takes longer to finish the project. And that can cause some real problems if you’re trying to hit a specific deadline (like finishing so you can move in before Christmas).

So how do you avoid scope creep? The first step is to pay close attention to the plans you and your builder have drawn up before you start the building process. This will help you avoid surprises. Once construction starts and you really think something needs to change, tell your builder what it is you don’t like and let him come up with a solution. Tell him what you want the end result to be rather than dictating the solution (“Move the wall eight inches to the right.”). Why? Your builder may be able to come up with a solution that doesn’t cause the scope of your project to creep out of control.

How will your builder respond in order to help you avoid scope creep?

• We can do that! Here’s your new estimate that reflects the increased cost.
• Sure, we can make that change! It’s going to affect the schedule a bit and the new finish date is now X.
• No problem! We can make that change for your, but it’s going to cost you an additional $X and it’s going to delay the completion date by a week. Do you still want to do it?
• Sorry! If you’re not willing to spend more money and if you can’t live with a later completion date, we can’t make this change for you.

Believe it or not, your builder hates scope creep as much as you do. Together you and your builder can eliminate scope creep—or at least keep it under control.

How Much Should You Spend on a CT Home Remodel?

This is probably the number one question we get from people in the Nutmeg State who are considering renovating or remodeling their homes. It’s an important and straightforward question, but the answer, naturally, depends on exactly what you plan to do when you remodel. Even after you’ve nailed down exactly what you want to accomplish with your renovation project—and have a solid quote for the cost—you need to address another, equally important question: what should you spend?

The National Association of the Remodeling Industry has come up with four steps that will help you calculate what you can really afford to spend remodeling your home. We’ve summarized those four steps here. 

1. Figure out how long you plan to remain in your current home. If your plan is to stay where you are for ten or more years, it makes sense for you to create the home you really want. If that’s the case you can think about spending as much as you are able to create the home of your dreams. But if you’re planning to move in the next one to five years, you’ll want to avoid over-building. Don’t put yourself in a position in which yours is the highest priced home in the neighborhood. One way to guard against that is to review neighborhood real estate prices regularly so that you can keep your home (with improvements) in line with the average home prices in your area. It can be tough to recoup improvement costs if you over-spend on improvements and end up with a house that’s out of character with the rest of the neighborhood.

2. Make sure you understand your current financial situation. Make a list of all debts—including payments you make on a monthly basis (mortgages, car loans, credit cards, or any other items with a fixed monthly payment). This list is your monthly expenses. Create a separate list of monthly expenses for things such as utilities, telephone services, groceries, or other general expenses.

3. Calculate your total gross monthly income. You should include any sources of income that you would list on a loan application.

4. Make a budget. The worksheet below will help you decide how much you can afford to pay for your remodeling project on a monthly basis. (We’re assuming you will be financing your remodeling project, rather than paying cash.)

Budget Worksheet

This worksheet uses the same simple debt-to-income (DTI) ratio that lenders use to determine if a homeowner can afford to take on a loan. You can use it to decide if you can afford the additional expense of a remodeling project.

Establish Your DTI

• Enter Your Total Monthly Expenses $   _________________ (see step 2 above)                  
• Add the Estimated Monthly Payment for the Remodeling $______________
• Estimated Total Monthly Payments = $  _________________                    
• Divide the Total by Your Gross Monthly Income  $  _______________                   
• Your DTI % =   ___________________                  

Each lender will approve loans at a specific DTI percentage (most lenders will tell you what their set DTI ratio is, if you ask). For example, if your lender accepts a DTI ratio of 45 percent and your DTI ratio is 30 percent, your loan would be approved. Your lender may also offer debt consolidation loans to reduce your DTI ratio.

Decide What Your Maximum Monthly Payment Should Be

You can determine your maximum affordable monthly payment by multiplying your monthly gross income amount by the lender's maximum DTI allowance. Then subtract your current total monthly expenses, excluding the estimated remodeling payment. Here’s how that looks:

• Gross Monthly Income $   ___________                  
• Multiply by lender's DTI ratio:  x __________                 
• Subtotal = $ ____________                     
• Subtract your total monthly expenses:  -___________                     
• Your maximum affordable monthly payment = $ ____________                    

If the last line is negative, you will not be able to borrow from that lender. See step 3 for further options.

Get Your Debt Consolidated

If your DTI ratio comes in above the lender's accepted percentage, or if your maximum affordable payment was too low to accomplish what you want, you might consider a debt consolidation loan. This will incorporate your current debts into your home improvement loan. In addition to allowing you to roll your debts into what may be a tax-deductible loan, it allows you to make one easy payment for your debts while lowering your DTI percentage. Another plus is that the interest rate on a debt consolidation loan may be lower, which will save you additional money. We recommend you talk to a qualified financial expert before making a move like this.

Right Time to Call a Home Builder

What's your biggest fear?  Spiders?  Snakes?  Being stranded in a lifeboat in the middle of the ocean with just a clown for company?  (Okay, that one's mine)  Or is it buying a home?  If yours is the latter, you are not alone.  Thousands of Americans have been tentative to buy a new home because of the struggling economy, but a survey, conducted by Public Opinion Strategies and Lake Research Partners, that was released earlier this month will hopefully put your fears to bed.  75% of voters said that owning a home is the best long-term investment to make, and 73% of voters who did not currently own a home said they planned to be a homeowner in the future.  Of those who do currently own a house, 95% say they are happy with their decision to buy.  So no matter which way you look at it, most people still like the idea of settling down in a place of their own.  And with the housing market showing small signs of a rebound, this may be the perfect opportunity call a home builder and start your house hunt.  Wouldn't you rather buy at the bottom than the top?

CT Home Building- Cost Cutting

The recent recession has been tough for many of us, and most people are constantly looking for ways to cut costs from the things they do on a daily basis.  Well it is certainly possible to cut costs when constructing your new home as well.  Using square shaped rooms as opposed to rectangular ones will cost the same amount, but increase the amount of living space in the room.  One example is that a 15 x 5 ft room would give you 75 sq. feet of living space while a 10 x 10 ft room would give you 100 sq. feet of living space.  Either way, you will be paying for a total of 40 feet for wall construction, but one option will offer you more room.

When it come to CT home building, this same principle applies to cube shaped rooms.  Cube shaped rooms offer the most optimal amount of space you can get for the cheapest price.  Sometimes people like to have high ceilings to make their homes look and feel bigger, but those extra tall walls are costing you extra money in construction.  You might consider adding a 4 foot tall attic, you should add 4 feet to the wall length as well so you can truly get the most bang for your buck.  Be sure to ask your builder if there are any other money saving techniques he can suggest.  Always keep in mind though: saving money can be a great feeling, but you never want to skimp where it counts.  At the end of the day, you're going to live in the house - so make sure you're getting what you want, even if it's a little bit more.