House-hunting, buying, and moving can be fun and exciting, but let’s face it: it’s a lot of work. Do you want to be doing this all again any time soon? It may be smart to consider where you want to be five, ten, or even twenty years from now. Will you be working from home? Starting a family? Some of the most financially secure people actually stay in their first homes for decades. Set parameters for your home search and consider square footage as well as number of rooms and bedrooms. Take in to account the overall property size and how much expansion you may be able to afford, including construction costs and additional property taxes and insurance.
Consider the possibilities… and the costs
Today, a one or two-bedroom home may suit you just fine. But will this be enough space down the road? Is the space configured in the way you like? How much can you change and how soon will you be able to afford those changes?
Even if your home is brand-new or in perfect condition when you move in, kitchens and bathrooms will likely need to be remodeled, updated or, at the very least, tiles re-caulked and replaced. Roofing will need to be maintained and repaired every few years and replaced every 12-20 years depending on the type of shingles.
As your family grows or your lifestyle changes, you may want to add a bedroom or two, a home office, den, or playroom. You may also want to expand your kitchen or add on a porch, sun room or even a sauna. Pools can be a plus in terms of family fun and fitness, but you’ll want to consider the time, safety precautions, energy, and money required for annual maintenance above and beyond the cost of installation. If you have young children in your home or in your neighborhood, you’ll need to build a fence or other barrier around the pool.
If you’re looking to increase the value of your home, make sure your home improvement choices aren’t too quirky or idiosyncratic. Projects with the best return on investment are generally kitchen and bathroom updates, finished attics and basements, entrances, garage doors, windows, and siding. If you are considering expanding the size of your home or adding any structures to your property, also bear in mind that your property taxes will be reassessed and your insurance costs may also increase.
Do you need to hire an architect?
Perhaps you don’t. But having an architect or designer on a renovation job can be just as important (and sometimes more important) than for new construction. No two renovations are alike. Your needs and requirements will be site-specific and you can’t just go out and buy a set of ready-made plans when you renovate or add on to your home. If you are making an addition, you will need blueprints. Unless your remodeling is purely cosmetic, you will need a building permit. Before issuing permits, most municipalities require that you submit plans to the code officer. National, state, and local codes require close adherence to regulations regarding wiring, plumbing, structure, and even rubbish disposal. If you need a loan to finance a major renovation, your lender may also want to see professionally prepared blueprints. The detailed listing of materials that designers prepare is also necessary for getting accurate cost estimates.
Many experienced contractors are as equipped to deal with simple remodeling as an architect. Some have established relationships with local code officers, so the red tape is minimal. However, if you have some special needs or your house has some peculiarities, you may want to draw upon the design skill and training of a professional designer or architect.
Hire a reputable contractor
Beyond painting, replacing floors, cabinets, vanities, or windows, most renovations and/or expansions will require the services of a licensed contractor (unless you’re a highly skilled DIYer.) A big project will require a general contractor, who may hire subcontractors for specialty work such as plumbing and electrical. If you happen to have renovation experience, you might choose to work as your own general contractor, hiring specific tradespeople for each job.
If you go with a pro, remember that references and personal recommendations are essential. Before you reach out to contractors, know what you want, at least in a general sense, and have some idea of your budget. Then interview several contractors to gain a sense of market rates for your job. Get at least three highly detailed written estimates. Once you’ve found a contractor or company you like, be sure they offer you a contract that spells out exactly what will be done, including deadlines, progress payments, the exact materials that will be used (down to the model number) and who will provide which materials. Any change in the project, whether you change your mind about products or ask for additional projects, should generate a written change order that includes the new work, materials and cost.
Review your home insurance
An addition or renovation will likely require an update on your home insurance. Whether or not you make major changes over the lifetime of your home ownership, your insurance needs will change over time. Conducting a home insurance review with your State Farm® agent at least once a year can help you determine if your policies and coverage still make sense for your current situation. Ask about discounts for things like alarm systems or having multiple policies. Consider recent purchases like furniture or personal items and insuring your home for the estimated cost to rebuild and replace rather than simply the current market value. You’ll want to select a policy amount equal to the estimated replacement cost of your home and its contents. Carefully review the limitations on coverage and exclusions in your policy. Consider adding more protection for things like jewelry, fine art, collections, musical equipment, high-end electronics, and other particularly valuable items. To make sure you're not overlooking important add-ons to your policy, talk to your State Farm agent about how your life has changed to be sure your policy is keeping up with you, your family, and the lifecycle of your home.
Home insurance is all about personalization; knowing what’s right for you and working with an agent who can make it happen. Consider the difference between market value (what your home is worth in real estate terms) and replacement cost (what it would actually cost to rebuild if you lost everything) and be ready to ask yourself what level of coverage feels best for you. Then, focus on your liability coverage. The amount of liability you need depends not only on the size and contents of your home, but also on your personal net worth. The more you’re worth, the more you have to protect and the more coverage you might need.