Dave Moore Companies

Building The Mid-South For Over Twenty Years

Home Renovation Guide To Cost, Budget, and Value

Cost, Budget, and Value

How do you figure out what your renovation will cost? How much should it cost? How do you set an appropriate budget? What is the likely payback at resale? How can you maximize your return on investment?

This section lays out the main factors that influence the economics of your renovation.


Renovation Cost
Will Vary By…
  • Type of renovation
  • Materials used
  • Geographic market
  • Finishes used
  • Resources used
  • Cost of permits
  • Cost of cleanup
  • Contingencies/unexpected
  • Move or stay/storage
  • Your time invested
  • Eating out or ordering in

At its simplest, cost is a function of materials, time and labor, and local market conditions.

Get multiple estimates. This will give you a good idea of what to expect. But, a good rule of thumb is this – whatever amount you’re zeroing in on – multiply it by a factor of 1.5 to cover changes, contingencies, and Murphy’s Law. Seasoned remodelers know that the unexpected always occurs. So just go ahead and plan for it. 
While not explicitly for renovations, www.building-cost.net can help with cost estimates. Also, check out www.letsrenovate.com which has a handy calculator for monthly financing.


If you’re like most of us, your list of needs and wants will exceed your ability to foot the bill. While the actual cost of renovation varies tremendously, you still need to establish a budget.

If you’re renovating for yourself or your family, a bank can help you figure out how much you can afford to spend, and how much you can borrow.

Generally, 20% to 30% of the value of your home is an acceptable amount to invest. For example, if your house is appraised at $200,000, it’s reasonable to invest another $40,000 to $60,000 in improvements.

Factor in

  • What you may have set aside
  • What you can borrow and the interest rate you can get
  • What is a reasonable monthly payment?
  • How long you plan to live in the home

Maximizing the Return On Your Investment

How do you know if your investment is going to pay off? You may not be planning to sell any time soon, but you want some idea if you’ll recoup your remodeling dollars.

If you are looking at resale soon, do consider renovations that give you the most bang for your buck.

What do the experts say about the best value for your renovation dollar?

Remodeling Magazine produces an annual Cost versus Value report, surveying some 60 markets across the U.S. When it comes to payback, these renovations have the highest return on investment:

  • Kitchen
  • Bathroom  
  • Re-siding (for curb appeal)
  • Master suite additions
  • Attic bedrooms.


When looking at these statistics, remember that they yield average costs and returns; the values in your local area or particular situation may differ.  


It’s Time To Get On Board With The 203K Loan

Today! Come See Us At The 2011 ‘Best of Home Expressions Show!’

Come See us this weekend!

David Moore Construction Will be at Booth #600

Dates: March 4-6

The 2011 Best of Home Expressions Show is brought to you by The Memphis Area Home Builders Association (MAHBA)

MAHBA is a proactive, not-for-profit trade association that unites all segments of the housing industry in Shelby, Tipton and Fayette Counties. Founded in 1944, MAHBA serves its members and the community by promoting quality housing through education and professionalism. To learn more about the association click here or go to wwww.mahba.com.

Do You Want to Know More About Renovation Loans?

Types of Renovation Loans

Purchase Renovation LoanA purchase Renovation or Rehab Loan is perfect for those who want to begin work on the house immediately after closing on the purchase of an existing home. With one loan and one closing funds are provided for both the purchase of the property and the renovation work to be done. Minimum down payments typically run from 3-5% of the completed value. You can borrow the rest.

Refinance Renovation Loan

A Refinance Renovation or Rehab Loan is similar to the Purchase Renovation Loan but is for those who already own the property they want to improve. With this type of loan any existing financing on the property is paid off and additional funds for the renovations are provided. Depending on what you qualify for, you can borrow up to 100% of the completed value of your home.

The types of Programs:

Knowing the Basics About Going Green For Your Home

From flooring to paint, there are lots of ways to green up your home — and lots of reasons, too. A green home uses less energy, water and natural resources; creates less waste; and is healthier for the people who live in it.

Tori Spott, a real estate agent who has a Green Designation from the National Association of Realtors, said that most homeowners want to be environmentally friendly, but they’re often concerned about the expense of going green and whether they’ll see a return on the money and time invested.

“The truth is, there are many easy and affordable ways to make your home green,” Spott said. “Simply replacing your existing appliances with greener versions will reduce energy consumption, which in turn reduces your energy bill.”

Why go green?

Going green is no longer a trend — it’s become a common-sense way to live. According to the U.S. Green Building Council, green homes are healthier, more comfortable, more durable, more energy efficient and have much a smaller environmental footprint than conventional homes.

If you’re ready to take steps toward greening your home, here are some green products and practices to help you get started.

See the light – Replace traditional incandescent bulbs with compact fluorescent light bulbs (CFLs). According to the Environmental Protection Agency (EPA), CFLs use 66% less energy than a standard incandescent bulb and last up to 10 times longer. Replacing a 100-watt incandescent bulb with a 32-watt CFL can save $30 in energy costs over the life of the bulb.

Conserve water – Showering is one of the leading uses of water in the home, accounting for nearly 17% of residential indoor water use, or about 30 gallons per household per day. According to WaterSense, an EPA-sponsored partnership program, installing a low-flow showerhead can help households save more than 2,300 gallons of water per year, without sacrificing shower performance.

Breathe easier – Forgo standard wall paint, which typically contain solvents, toxic metals and volatile organic compounds (VOCs) that can cause ozone pollution and indoor air quality problems with negative health effects, according to the EPA. Instead, buy a zero- or low-VOC paint product, now offered by most major paint manufacturers.

Save energy – Install a programmable thermostat, an ideal tool for controlling the heating and cooling of your home. Simply by using pre-programmed settings (i.e. programming a cooler temperature during the day when the house is empty), a programmable thermostat can save about $180 every year in energy costs according to the EPA.

The green brand
When incorporating green building products into your home, be sure they have been certified as eco-friendly. Below are some terms from reputable and federally approved organizations that you should be aware of when shopping for green home goods.

Energy Star – A trusted, government-backed symbol for energy efficiency, Energy Star-labeled products meet energy efficiency specifications based on a set of key guiding principles, including the ability to achieve energy efficiency through broadly-available, non-proprietary technologies.

LEED for Homes – A voluntary rating system developed by the U.S. Green Building Council that promotes the design and construction of high-performance green homes.

WaterSense – The WaterSense label makes it easy for consumers to recognize products and programs that save water without sacrificing performance or quality. Independent, third-party licensed certifying bodies certify that products meet EPA criteria for water efficiency and performance by following testing and certification protocols specific to each product category.

In the long run, a greener home isn’t just good for the environment, it’s also good for homeowners. Minor changes like installing ceiling fans and low-flow toilets or switching to low-VOC paint can add up to major cost saving and reduce potential health risks for families.

Go Green! Your Home (and Your Bills) Will Thank You

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The FHA 203K Loan Program: You Can Afford Home Renovations

The Section 203(k) mortgage program is the HUD’s primary program for the rehabilitation and repair of single family properties. Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security.

When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made. When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property.

To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.

For more information, please call David Moore Construction direct.

Go Green in 2011!

Five Steps to a Greener Home

1. Find

Go through every commercial product you use for your kitchen, bath, car, garden and body.  This includes cleansers, polish/wax, cosmetics, moisturizers, shampoos, pesticides, air fresheners, disinfectants, fertilizers and paint.

2. Sort
Dispose of the unwanted items by dropping them off at your local hazardous waste location, or contact your local recycling program to find out if there is a specific day for hazmat pickup.  Don’t throw them into the garbage because they’ll end up in your local landfill and waterways.

3. Replace

Look for environmentally conscious products.  Many natural, organic and toxin-free products are now available at regular grocery stores and chains such as Target and Bed, Bath and Beyond.  You can also purchase many of these products online. Another rule of thumb is that the fewer the ingredients, the better off you—and the environment—will be.

4. Invest
Natural housecleaning products and body care items can be a bit more expensive.  But they are much cheaper than treating health problems associated with harmful ingredients.  In spending a little more on healthy products you are buying a lot of peace of mind.

5. Save
Since more and more multi-purpose products are becoming available, you don’t need to buy as many.  An even more cost-effective solution is to make products yourself with a few basic ingredients. You can find simple recipes for homemade cleaning products in the article, “Making Natural Cleansers.”

How Do You Know When It’s Time to Renovate?

Knowing whether it’s time to renovate or not can help a homeowner save time and money. Homeowners who may be getting a home ready for resale, or who are just trying to decide if it’s time to update the kitchen or bathroom may be confused as to whether or not the home renovation needs to take place. In today’s real estate and home mortgage markets, it makes more sense than ever to be sure that the bathroom or kitchen renovation being planned is the right way to go.

When it’s Time to Renovate the Bathroom

Bathroom renovations can help transform a small, cramped or outdated bathroom into a more user friendly space. But when is it really time to renovate the bathroom? The first step to deciding is determining how long the current homeowner will be living there. If the house is going to be sold soon, and the homeowner is trying to decide if updating the bathroom will help resale value, their decision process will differ from a homeowner planning on remaining in the home for at least ten years.

Any time that there is a leak, water damage, cracked or damaged tiles, or a leaking faucet that is not shutting off, it is absolutely time to renovate the bathroom. Damage should be caught and repaired as quickly as possible to avoid a more expensive renovation down the road, if water damage has spread to other areas of the home. Homeowners hoping to sell the house will have an easier time selling a bathroom that is clean, and in good shape, rather than a bathroom that may be infested with mold, or has a lot of damage.

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