What Homeowners Should Know Before Starting a Major Renovation

I’ve been in the home improvement industry since 1996. Nearly 30 years of watching homeowners make the same mistakes before, during, and after major renovations. Some of those mistakes cost a few hundred dollars. Others cost tens of thousands.

Whether you’re planning a kitchen remodel, a full roof replacement, or an addition to your home, there are things you need to know before you sign a single contract. This isn’t generic advice from a home improvement blog. This is from someone who’s been on the other side of those projects for decades.

TL;DR: The biggest renovation mistakes happen before construction starts. A 2025 study found that 85% of homeowners spent money on unplanned repairs, with 1 in 4 spending $5,000 or more. Budget at 80% of your max (keep 20% for surprises), vet your contractor thoroughly, get everything in writing, and never skip permits. Patience in the planning phase saves money in the execution phase.

Set your budget before calling anyone

According to the Joint Center for Housing Studies at Harvard (2025), American homeowners spent more than $600 billion on renovation costs in 2024, which is 50% higher than pre-pandemic levels. The median household spent $20,000 (Houzz, 2025). But the number one source of frustration in home renovation is money. Not because projects are expensive, but because homeowners start without a clear budget.

Here’s what I tell people: figure out the maximum you can spend, then plan for 80% of that number. The other 20% is your cushion for the unexpected. And trust me, something unexpected always comes up. Rotted subfloor under the tile. Outdated wiring behind the walls. Water damage nobody saw during the walkthrough. A 2025 survey found that 85% of homeowners spent money on unplanned repairs, with 1 in 4 spending $5,000 or more.

If you don’t have that cushion built in, you’ll either have to stop the project halfway or go into debt to finish it. Neither is a good outcome.

How do you choose the right contractor?

The remodeling industry faces a workforce gap approaching half a million workers, and nearly 90% of contractors report difficulty finding qualified craftspeople (2025 industry data). That means there are more contractors out there than ever, but the quality varies wildly. I’ve written about choosing the right contractor before, and I’ll keep saying it: this is the single most important decision you’ll make in any renovation.

At minimum, check these things: Are they licensed and insured? Do they have verifiable references from the last 12 months? Will they put everything in writing? Do they have a physical business address, not just a P.O. box?

When I was running Penebaker Enterprises, we built our reputation on transparency. Every scope of work was documented. Every change order was written and signed. That’s the standard you should expect from whoever you hire.

Understand what you’re actually paying for

From the end of 2025 to the beginning of 2026, material costs rose 3% to 15% for most major categories, with some premium brands like Miele seeing increases over 20%. When you get a renovation estimate, don’t just look at the bottom number. Read the line items. Understand what materials are being used. Ask about labor costs versus material costs. Find out what’s included and what’s an add-on.

A lot of homeowners compare bids by total price alone. That’s a mistake. A $25,000 estimate using premium materials and experienced crew members is a completely different product than an $18,000 estimate using builder-grade materials and subcontracted labor. You’re not comparing apples to apples unless you read the details.

Don’t be afraid to ask questions. A good contractor will welcome them. If they get defensive or vague when you ask about specifics, that’s a red flag.

Timelines are estimates, not promises

Every homeowner wants to know the exact day their project will be finished. I understand that. But construction timelines are estimates based on best-case scenarios. Weather delays, material backorders, permit approvals, inspection schedules. All of these can push a timeline.

The home improvement industry in 2026 is dealing with supply chain improvements from the last few years, but some specialty materials still have lead times. If your heart is set on a specific tile or fixture, order it early. Don’t wait until demolition day to find out it’s backordered for six weeks.

A reasonable contractor will give you a timeline range, not a single date. If someone guarantees an exact completion date, be skeptical.

Permits are not optional

I can’t tell you how many homeowners I’ve met who skipped permits to “save time and money.” It almost always costs them more in the long run. Unpermitted work can create problems when you try to sell your home. It can void your insurance coverage. And in some cases, you can be required to tear out the work and start over.

Your contractor should know which permits are required for your project and should handle the application process. If they suggest skipping permits, find a different contractor. That’s not saving you money. That’s creating a liability.

Live in the space before you redesign it

This one is specific to people who just bought a new home. Before you gut the kitchen or tear out the bathroom, live in the house for a few months. You’ll discover things about how you use the space that you can’t see in a walkthrough or floor plan.

Maybe that weird alcove is the perfect spot for a reading nook. Maybe the kitchen layout actually works better than you thought once you cook in it a few times. Or maybe you’ll realize the real problem is lighting, not layout, and you can solve it for a fraction of the cost. Patience in the planning phase saves money in the execution phase.

The bottom line

A major renovation should add value to your home and improve your quality of life. But that only happens when you go in prepared. Know your budget. Vet your contractor. Understand the scope. Plan for surprises. And don’t skip the permits. Nearly 73% of homeowners are adjusting their renovation plans due to elevated costs in 2026. Being informed before you start is the best way to protect your investment.

I’ve seen thousands of home improvement projects over nearly three decades. The ones that go well aren’t always the biggest or most expensive. They’re the ones where the homeowner did their homework first.

Looking for more from inside the home improvement industry? Check out my recommended tools and resources or connect with me on LinkedIn.

Frequently asked questions

How much should I budget for a home renovation?

The median household spent $20,000 on renovations in 2024 (Houzz, 2025), but your budget depends on the scope. The most important rule: plan for 80% of your maximum budget and keep 20% as a contingency. With 85% of homeowners encountering unplanned repair costs, that cushion isn’t optional.

How do I know if my contractor is trustworthy?

Check licensing, insurance, and recent references. Get everything in writing, including scope, timeline ranges, and payment schedules. A good contractor will welcome your questions. If they get defensive or suggest skipping permits, that’s a red flag. With a workforce gap of nearly 500,000 workers, quality varies widely.

Should I get multiple renovation bids?

Yes, get at least three. But don’t compare bids by total price alone. Read the line items, understand what materials are specified, and ask about labor versus material costs. A lower bid using builder-grade materials is a completely different product than a higher bid using premium materials and experienced crews.

{ “@context”: “https://schema.org”, “@type”: “FAQPage”, “mainEntity”: [ { “@type”: “Question”, “name”: “How much should I budget for a home renovation?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “The median household spent $20,000 on renovations in 2024. Plan for 80% of your maximum budget and keep 20% as a contingency. With 85% of homeowners encountering unplanned costs, that cushion is essential.” } }, { “@type”: “Question”, “name”: “How do I know if my contractor is trustworthy?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Check licensing, insurance, and recent references. Get everything in writing. A good contractor welcomes questions. If they suggest skipping permits, find someone else.” } }, { “@type”: “Question”, “name”: “Should I get multiple renovation bids?”, “acceptedAnswer”: { “@type”: “Answer”, “text”: “Yes, get at least three. Compare line items, not just totals. A lower bid using builder-grade materials is a different product than a higher bid using premium materials.” } } ] }

Last updated: March 9, 2026