Items like construction costs, permit fees or debris removal aren't the only expenses to consider when calculating the total costs of a home remodeling project. An addition that significantly raises the value of a home might also increase the cost of property taxes and homeowner's insurance, based on that increase in value. Whether you're adding a deck (averaging about $8,000-$11,200 for 16'x20') or a second story (about $105,000-$450,000 for 1,500 square feet), in some areas the local building department's final inspection and sign-off of a completed project may automatically trigger the attention of the property tax assessor, to determine if more taxes need to be collected each year. The exact amount of any tax increase will depend on location and be based on the value of the new addition, but it's a factor to consider when estimating overall costs. It's also important to contact your homeowner's insurance company immediately after the project is complete, so if there's a fire or other damage, the coverage is enough to replace what was lost. Tell the insurance company how much it cost to build the addition, and they will determine the cost to increase the coverage on the existing policy. This can also be a good time to review your homeowner's policy and rates, to make sure you're getting the best deal. So when penciling out a budget for a desired home improvement, remember to include the costs that can come after the work is done.
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by Patricia Lynn Henley
Posted on August 5 2013
Reddit
