The Housing Scene by Lew Sichelman

The Forgotten Costs of Remodeling

You’ve asked three highly rated contractors to bid on your planned kitchen remodel. You made sure each quote covers exactly the same items, so you can compare them more easily. But have you made sure everything is included?

Many people don’t, and they end up paying more for their remodeling projects than they thought they would.

It’s not that remodelers are dishonest, although some certainly are. But they often leave out key costs -- sometimes to lowball their estimates so they can win the job, sometimes because they simply forget. Either way, it will end up costing you more.

Permits are one often-omitted cost. Most remodeling projects require building permits -- in Bonita Springs, Florida, you need a permit to change out a garage door, for crying out loud -- but many contractors leave this cost out. Some want their clients to obtain the necessary permits, while others just overlook it.

Either way, if a permit is necessary, don’t try to get by without one. When soliciting bids, make sure you ask that the cost of permits be included, and specify who will “pull” them. Realize, too, that the cost of one or more permits may not be a fixed amount. Depending on where you live, it could be a percentage of the total cost of the renovation.

Another cost sometimes omitted: waste removal and cleanup. If it isn’t included in the contractors’ bids, you’ll have to pay for dumpsters to be delivered, then hauled to the landfill and emptied.

Some of remodeling’s hidden costs have nothing to do with your contractor. For instance, your property taxes are likely to increase. Once a permit is pulled, the local tax assessors will be notified. And sooner or later, they will show up at your front door to have a look at the job and recalculate the value of your property.

In California, according to design-build firm New Avenue, the typical tax increase is 0.5 percent of the amount you spend on your project. So, if your remodeling project runs $300,000 -- things are costly in California -- you could expect an increase of $1,500 or so in your annual property taxes.

If you are renting out the property, you’ll likely recover the extra cost in the form of a higher rent. But if you are an owner-occupant, that jump has to be part of your deliberations in whether to move forward or not.

Your utility bills are likely to go up as well -- certainly during construction, if only because the workers will need heat or air conditioning to be comfortable as they perform their magic. They’ll also be going in and out constantly, which puts even more of a strain on your HVAC system.

Furthermore, you’ll be supplying the electricity needed to run those table saws, nail guns and other power tools, not to mention the water for bathroom breaks and end-of-the-day cleanup. You might even have to pay for port-a-potties if your bathrooms are being demolished, or if they’re off-limits to workers.

Figure on paying a higher homeowner’s insurance premium, too, for your improved property. And don’t forget to tell your insurer about the project ahead of time, so you’ll be covered if an accident injures an uninsured worker while on your property.

If you are yanking out walls, you might run into some unforeseen, yet costly, problems. For example, you could have a termite infestation, or you could find snakes or rodents living behind the drywall. Faulty wiring, old plumbing and hidden asbestos or lead paint will have to be taken care of, as well, and any further work will be delayed until they are.

Finally, consider the disruption that a major remodeling project will be to you and your family. Workers will show up early in the morning, upending your usual routine. If you ask that workers don’t arrive until later -- say, 9 a.m. instead of 7 -- that will only serve to lengthen the project and cause even more turmoil.

If you’re redoing your kitchen, you could be without a stove, oven or even a refrigerator for days, if not weeks. That means you’ll be eating out -- a lot -- or ordering tons of takeout. Depending on the size of your family and their tastes, that could run into the hundreds, if not thousands, of dollars.