​What You Need to Know Before Investing in Home Renovation

Raf Howery |

Why do we all dread the entire process of home renovation? Who among us hasn’t heard a renovation horror story? Who knows ANYONE who was able to renovate their homes and stay on time and budget? I certainly don’t, although I know one person who was able to stay on budget...by paying twice the original estimated price! I’ve seen some episodes of ‘Love It or List It’ and ‘Property Brothers’ where they (albeit rarely, because it would not make good TV without some twists and turns) did a renovation and it came out perfect, both on time and in budget.

TV shows aside, let’s analyze why this issue still persists in an age where you can find convenience in everything.

  • Pricing is Completely Opaque
    No one knows what it should cost. If we tried to outsmart the system and asked for three different bids thinking we are encouraging competition to get the best price, you probably ended up with three different price points. You cannot tell why one is more expensive than the other. Is the expensive contractor being honest and telling you the truth? Is the cheap contractor underpricing his bid only to hit you with a change order later? What is the right price? Trying to read those bids and understand takes weeks to figure out. We’re all so busy, no one has time to get to the bottom of it.
  • Timing is Theoretical
    We think we can outsmart the system by imposing penalties on the professional in the contract for their delays, but the reality is that we want our projects done on time. Contractors take on as many projects as they can because they cannot say no to a project. Their main problem is that they cannot fully forecast their year, so they accept projects to keep a contingency. When they are double booked there will be delays and they’d rather pay the penalty than lose another project.
  • Our Circle of Hiring the Right Professional is Tied to our Friends and Neighbors
    Most renovation hires come through word of mouth. The problem with that is we have a limited number of options to compare. Even worse, the contractor will be pricing it the same way he or she did for your friend or neighbor. This means you’re locked within the same price point and the same pros.
  • We Don’t Understand Construction
    We think we can change our minds during the construction process without penalty. In reality, delays are often caused by homeowners when they change their minds and/or taste. Change orders cost money, but we become so emotionally attached to our newest idea that we accept the change.

    A combination of price opacity, lack of knowledge about construction, our limited circle of hiring and the difficult nature of forecasting needs by the contractor all create reno-phobia, which has become most homeowners reality.
At Kukun we’re working on solving those issues by creating tools that inform, control, expose, hire and manage the entire process. We know there will always be surprises in construction, but we also know that homeowners cause at least 50% of them and our mission is to fix that.

Written by Raf Howery, CEO and co-founder of Kukun

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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