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Zillow has come out with a new service which can help you estimate the costs of a remodel. The service, named Zillow Digs, allows you to input the type of remodeling job you want to do, the area of the country where you live and approximately how much you want to spend. The program will then return photos of similar remodels along with total cost, contractor costs and material costs. Based on your area, you will be given an average cost estimate as well as an estimated range for the remodel.
This tool could be useful in estimating the cost of a particular remodel, but property investors must proceed with caution. Every remodel is unique. Once you start opening up walls, you can uncover a slew of problems that you had not budgeted for.
You should always have a contingency fund worked into your budget in case these unexpected expenses pop up. For example, if you have a total budget of $30,000 for a kitchen remodel, you should allocate $27,000 of that to the remodel and then have $3,000, or 10% , as extra money to use for unexpected or unaccounted for expenses.
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