The best way to
prepare for hidden costs is to ask the contractor upfront
which costs he expects to rise.
To prepare mentally,
you can ask the contractor's references whether the
final costs of their projects exceeded the estimates,
and by how much. Those references can also tell you
what the hidden costs were. If a contractor has a history
of estimating too low, you can either find another contractor,
or you can anticipate and prepare for a higher final
Also, make it clear at the beginning of
the project that you want the contractor to let you
know the minute he knows the project will cost more
than expected so you have time to get your finances
Do-it-yourselfers aren't immune to hidden costs. They,
too, can find themselves paying more for a project than
they originally anticipated.
One hidden cost that many homeowners don't
think about is permit fees. Depending on the type of
work you're doing on your home, you may be required
to apply for a work permit. For example, a building
permit is generally required from local building-inspection
authorities for work that changes or adds to the structure
of your property. Other permits you may need, depending
on the project, are for electrical, mechanical and plumbing
work. Often, you must pay an application fee in addition
to the cost of the permit. Permit costs are generally
based on the estimated construction cost of the project.
Another place a DIYer might underestimate
a project is when coming up with all of the supplies
and tools needed. Unless the job is one that you've
done before, chances are pretty likely that there is
a piece of equipment you'll forget to list or there
is a tool that might make the job easier. If you're
doing a task for the first time, always give your budget
some breathing room for supplies you didn't think about.
Unfortunately, another hidden cost could
arise from breaking something and having to fix it.
"If you're renovating your bathroom
and you mess it up, you may have water all over the
place and you have to pay for them to rip up the wall,"
says Demian Faunt, senior editor at DoItyourself.com.
For that reason, it's important that you
be very knowledgeable about a project before attempting
to do it yourself.
"Look up how to do the smaller projects
that not only are in your budget but your expertise
level so you don't have to call and have a contractor
come in" to clean up after you, Faunt says.
A home-improvement project can be
one of the most rewarding investments you can make.
But when coming up with your budget, make sure you include
room for the unexpected costs that are likely to arise.
That way, you can spend more time enjoying your improvements
and less time worrying about how you're going pay for
Posted: April 12, 2006