It is estimated that less than 40% of homeowners set aside a budget for home improvement repairs or renovations. As Ohioans continue to spend 10% more each year on renovations and remodeling, a realistic cost estimate for home improvements becomes increasingly important. If a complete remodeling of a kitchen actually costs $18,000 – $20,000, but your estimate comes in considerably lower (see the full article, below), you may struggle to come up with the rest of the funds. According to a survey of almost 1,000 people about real costs versus estimate costs, one of the common denominators for underestimating spending seems to be the price of labor.
The push for a higher minimum wage in Ohio continues, but homeowners need to remember wages for tradespeople are not the same as the State’s current or proposed minimum. For example, many renovations require carpenters and electricians. According to various sources, a carpenter or electrician in Ohio will earn approximately $22 per hour.
Estimating the cost of a renovation or repair requires you to consider wages, the cost of materials, the surface area of a house in certain cases, the level of quality desired, and much more.
How Much Does That Renovation Really Cost?
By Elyse Umlauf-Garneau
Homeowners, it turns out, don’t have a realistic grip on the costs of home improvement projects. That’s according to a recent Discover Personal Loans survey.
An average of 78 percent of those surveyed underestimated how much it would cost to remodel a kitchen, based on average costs from HomeAdvisor.
Some examples of homeowners’ underestimations include:
Average actual cost: $19,920
Average perceived cost: $10,388
Difference: 48 percent or $9,532
Average actual cost: $9,274
Average perceived cost: $6,371
Difference: 31 percent or $2,903
Average actual cost: $6,919
Average perceived cost: $4,499
Difference: 35% percent or $2,420
Average actual cost: $6,692
Average perceived cost: $1,176
Difference: 74 percent or $4,926
Air Conditioning installation
Average actual cost: $5,233
Average perceived cost: $3,047
Difference: 42 percent or $2,186
According to Discover, one common budgeting pitfall is failing to factor in labor costs, which can account for one-third of a project’s total cost.
So plan accordingly.