Hidden costs

Southern Living, May 1998

A major renovation will often entail some unexpected expenses. Here are a few. Increased property tax: An addition or substantial remodeling will, no doubt, increase the value of your property. It will also increase the amount of property tax. The tax increase may or may not be proportional to the amount of money you spend. Check with the tax assessor to get a better idea of the amount of the new taxes. If your property taxes are paid by the mortgage company, a representative there can give you an idea of the increase in your monthly loan payment.

Increased insurance: Before you begin construction, check with your insurance agent about increasing coverage both during construction and after the project is finished. If your homeowner's insurance is normally paid out of escrow by your mortgage company, ask for an estimate of the monthly increase.

New furniture: That new addition is probably going to need some new furniture. You might as well go shopping now to get a better idea of how much furniture, rugs, art, lamps, and other accessories will cost. (Remember that a new deck or terrace will probably need new outdoor furniture.)

Landscaping: At the very least, you will need to replace sod and shrubs damaged during construction. But a remodeling or addition may also necessitate additional improvements outside. Be sure to budget for this. Don't forget the cost of hardscape improvements or repair, such as drives, parking areas, walks, decks, and terraces.

Increased fees: Some local fees, such as sewer or garbage fees, may be based on the size of the house or the number of bedrooms or baths. Usually the increase will be small. Call the government entity providing the service for a cost estimate. If your home uses a septic system, an increase in the number of bathrooms could require a larger septic tank. Check with your county health department.