11 Money Questions You Must Ask Before Renovating Your Home

Renovating your home is an exciting undertaking — but it’s also one in which it quite literally pays to be prepared. If you jump in without doing your homework, you could be faced with expenses down the line that could’ve been avoided.

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GOBankingRates spoke with renovation experts to get the lowdown on the 11 money questions you must ask before renovating your home. Here’s what they said .

What’s My Budget, and How Will I Finance It?

Before you start tearing down walls, it’s important to have a clear understanding of exactly where your finances are at.

“Understanding your financial limits is crucial to avoid overspending,” shared Drew Heberer, a real estate investor and renovation expert with Heberer Homes . “Assess your financing options, whether through savings, loans or lines of credit.”

Jon McCrory, CEO of Broadwalk Investments , who bought his first rental property at just 22 years old and now has 14 years of experience in buying, renovating and selling properties, added, “Consider your financing options. Will you be using savings, taking out a loan or perhaps tapping into a home equity line of credit? Understanding your financing will help you set a realistic budget and stick to it.”

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Have I Accounted For Unexpected Costs?

It comes as no surprise to learn that renovations often come with surprises! “Unexpected costs are common; a contingency fund of at least 10%-20% of your budget can cover surprises,” Heberer said.

Josh Rudin, owner of ASAP Restoration LLC , cautioned about hidden fees.

“Many times with projects that homeowners decide to take on, they get in over their heads when having to deal with unexpected issues. This can be anything from a plumbing problem that changes their design options, or one that adds expenses in order to reroute it,” he said.

What’s the Return on Investment?

Next up, consider how your renovation will impact your home’s value.

“Think about how this renovation will impact the value of your home,” McCrory said. “Ask, ‘Will this upgrade increase my home’s value, and if so, by how much?’ This is especially important if you plan to sell your home in the future.”

What Are the Must-Haves vs. Nice-to-Haves?

Knowing the difference between nice and must is an important skill to learn.

“Prioritize your renovation needs,” McCrory said. “Identify what’s essential and what’s simply a nice bonus. This helps in making tough budget decisions and ensuring you get the most value out of your renovation.”

How Long Do I Plan To Stay in This Home?

Your long-term plans should always influence your renovation decisions.

“Consider your long-term plans,” McCrory said. “If you’re planning to move in a few years, it might not make sense to invest heavily in renovations. On the other hand, if this is your forever home, spending more might be worth it.”

What Are the Hidden Costs?

This is a tricky one, but there are almost always hidden costs — and it’s up to you to sniff them out.

“Renovations often come with hidden costs,” McCrory said. “Ask yourself, ‘Have I accounted for permit fees, design costs and potential increases in property taxes?’ Being aware of these can prevent budget overruns.”

Sean O’Rourke, the national director of merchandising at Floor Coverings International , added, “In the end, the ultimate question will be — can I afford this, and do I have a reserve amount for the unforeseen costs that will ultimately arise?”

How Will This Affect My Daily Life? Do I Need To Move?

Do you want to — or even, can you — live in your house through the renovation?

“Think about the disruption to your daily life,” McCrory said. “Will you need to find temporary accommodation, and if so, have you included that in your budget? Renovations can be stressful, and having a plan for how to live through them is key.”

Do I Need Professional Help?

Deciding whether to DIY or hire professionals is important.

“Consider whether you need an architect, designer or contractor,” McCrory said. “Ask yourself, ‘Do I have the skills and time to DIY, or should I hire professionals?’ Professional help can be costly but often worth it for quality and efficiency.”

Are My Contractors Properly Licensed and Insured?

Protect yourself by ensuring your contractors are qualified and covered.

“Being licensed, bonded and insured means that if something goes wrong, it won’t be on the property owner to pay for it,” Rudin said. “That can mean anything from the contractor accidentally breaking a water line and flooding your home, to one of their workers falling off of your roof and breaking a leg.”

How Will This Impact My Home Insurance?

Don’t forget to consider the insurance implications of your renovation.

“Renovations can affect your home insurance premiums,” McCrory said. “Check with your insurance provider to understand any changes in coverage or costs and factor that into your budget.”

Can I Use the Existing Structure/Plumbing?

Before you start from scratch, always think about what you can salvage first.

“If the answer is [that you can use the existing structure or plumbing], you can somewhat limit the total cost of the project,” O’Rourke said. “If not, you’ll have to really take into consideration how much changing the structure is going to cost.”

This article originally appeared on GOBankingRates.com : 11 Money Questions You Must Ask Before Renovating Your Home