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NEW YORK (MONEY Magazine) -
You've just parted with serious cash to buy your first home. Now you need to part with more so the place no longer screams bad taste, broken pipes and bathrooms circa 1970.
Or maybe, with real estate prices through the roof, you can't afford to trade up from the starter home you bought two children ago. So you've decided to upgrade instead.
Whatever your reasons for renovating, take heed: Rookies often "don't understand how much it will cost, how long it will take or how proactive they should be," says Sal Alfano, editor of Remodeling magazine. Here are the pitfalls to avoid.
Mistake no. 1: Underestimating the cost
No matter how carefully you budget, count on spending at least 10 to 20 percent more than your initial estimate. That's because expenses invariably pop up that you couldn't anticipate beforehand.
Once workers knock down walls or rip up flooring, for instance, they may find mold, rotting pipes or other structural problems that need repair.
When Marc Siegel, a corporate underwriter in New York City, wanted to put a new floor on top of an existing tiled one, he was told by his contractor once work began that the tiles were too loose and the old floor would have to be ripped out. Extra cost: $3,000. Siegel agreed -- but only after negotiating the price down to $1,500.
To help minimize unexpected outlays, research the materials and brands you'd like to use before commissioning work, so you don't have to rely solely on contractor estimates. That $2,000 high-end fridge you choose after your kitchen remodeling begins may cost twice as much as the standard appliance he assumed you'd buy.
Mistake no. 2: Pinching pennies
Sure, you want to save a few bucks where you can. But sometimes it doesn't pay to scrimp, says Danny Lipford, host of the syndicated TV show "Today's Home."
With contractors, go with someone who's highly recommended and experienced in your type of renovation, not the cheapest guy. Favor quality products for anything installed in your walls; the cost to replace, say, a faulty shower valve is high since it involves breaking the wall and calling in a plumber.
Nor should you stint on items you'll use every day. Buy what you love. Otherwise, you'll kick yourself every time you turn on a faucet or open a cabinet.
Mistake no. 3: Failing to anticipate chaos
The stress of a renovation builds as the dust mounts, workers traipse through your home and everything takes too long.
"Remodelers count on at least one [client] explosion per job," says Alfano.
To minimize surprises, ask potential contractors lots of questions about the process, like "What's your time frame?" and "What time do you start and finish work?" Be clear too about your preferences, such as how often you'd like updates and how much the contractor can spend without consulting you.
Then tame your inner Felix Ungar. Good contractors will clean your place every day. But remember, "broom clean" doesn't mean "mop clean," Alfano says. Some dirt and debris are inevitable.
Mistake no. 4: Overestimating the payback
Not all renovations are equal equity builders. Typically, you'll recoup the most on bathroom and kitchen jobs. But the exact payback depends as much on where you live as on the project itself. Talk to local real estate pros for the lowdown on what you can expect in your area.
What you can't measure in dollars and cents, of course, is the pleasure you'll derive from the improvements to your home. In the end, since you are the one who will be living there for a while, that's the payback that matters most.
Click here for more real estate stories.
Renovating? Click here to read more.
Jeanne Sahadi is a senior writer at Money.com. E-mail your comments to her at starting_out@moneymail.com.
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