8 hidden remodeling expenses you probably haven't considered


Holly Johnson

Holly Johnson

Blog author Holly Johnson

Published|3 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Updated June 21, 2018: Renovations can certainly add value to your abode. But homeowners should remodel carefully. Some small changes actually lower your home's resale value. See a new analysis from Zillow, which found homes with brick or raspberry red kitchens sell for $2,310 less than expected.

Plus, remodeling can go from cost-effective to cost-prohibitive if you don’t watch out for the hidden expenses that come with extensive home renovations. We reached out to some experts to find out the most common remodeling expenses people uncover — and how to avoid them.

1. Water damage

Your house may be keeping faulty plumbing or leaks a secret, says Gideon Lipnickas, owner of design and build company New Concept 180 in Chicago. You don’t always find water damage until you open up walls to begin your remodeling project. Review your water bill on a regular basis for any signs of increased charges, which could point to a leak.

2. Mold

Water damage causes mold — and discovering black mold can certainly put a halt on a project. According to Miljana Popovic, social media manager of Mold Busters, one way to prepare for (and prevent) a costly logjam is to hire a trained mold inspector to assess the areas you're renovating ahead of time.

"Utilizing various diagnostic tools like an infrared camera, they will be able to see hidden issues that can cost you down the line," Popovic says.

3. Demolition costs

"People tend to budget for all the new things they want, but there is a large hidden cost on the labor to demo the existing materials, and the costs to properly remove the materials to a landfill," Bodrozic says.

Make sure to budget for demolition unless you plan to do it all yourself. Even then, you may need to pay for a dumpster or additional disposal costs.

4. Pricier homeowners insurance

Many people are under-insured after large renovations because the dwelling coverage on their home insurance policy is not updated. Other projects, like adding a swimming pool, might necessitate more liability coverage. (Confused about homeowners insurance? We've got answers to common policy questions.

While remodeling your home is sometimes cost-effective, update your homeowners insurance policy once the project is complete so you have adequate coverage. (We can help you comparison shop for homeowners insurance here.)

5. Incorrect contractor estimates

Contractors don't always estimate costs correctly. Make sure you compare bids from several contractors and get detailed outlines of costs. Remember, "don’t just choose the cheapest contractor," Lucas Machado, president of House Heroes, says. "You get what you pay for" and you also may end up paying more for items they left off or underbid on.

6. Permits

Permits are required for certain remodeling projects, and they aren’t free. Prices are based on job size and location, but you'll have to account for the charge.

"If you try to skip getting permits and then try to sell, the town could require you to remove your work and start over,” Realtor Kris Lippi, of Get LISTED Realty, says. “This of course can cost a homeowner thousands of dollars."

7. Termite damage

It's not uncommon to discover evidence of past termite damage in the structure of your home, says Melanie Davison, General Manager of Masters Touch Pest Solutions.

"Wood destroying insects can move through the foundation of your home, hollowing out any building materials made from cellulose," Davison says. "That includes wood, as well as paper and some insulation materials."

You can't really prevent damage once it's happened, but it's a good practice to check for these pests on a regular basis (either you or an exterminator can do this).

8. The full list of expenses

Too many people dive into a home remodeling project without taking the time to budget for the full list of expenses they’ll face, says John Bodrozic, co-founder of digital home management site HomeZada.

"A kitchen remodel is a great example because homeowners may budget for the major items such as cabinets, countertops and appliances," Bodrozic says. "But they forget to budget for the garbage disposal, the backsplash tile, the light fixtures and the fume hood. The incomplete list leads to more costs than they originally expected."

Looking to avoid budget gotchas? We've got 15 hidden summer expenses you should watch out for here.

Image: Imgorthand

Ready to shop for life insurance?

Start calculator