Focus on small items to update your home so you're keeping up with the Jones', not out-spending them

Every homeowner thinks about ways to improve and update their home, but many of us don't know how to get past the initial wish list stage, nor do we know how to afford major renovations.

That's why it might be smarter to to focus on simple items such as updating countertops or cabinetry so you're keeping up with the Jones' and not out-spending them.  And in many cases, these small improvements can give you a pretty good return on your investment.  These projects include adding a deck or installing new siding or windows and updating kitchens and baths.

"If you are considering updating your house this year, consider remodeling the kitchen or the bathroom," says Angie Hicks of Angie's List .  "Those two rooms get the best return on your investment- about 85 percent. But the key here is not overdoing it, but keeping up with the Jones's. So if you're the only house in the neighborhood without granite countertops then it makes sense to add them, if you're not – skip out on that extra."

When it comes to remodeling your kitchen and bathroom, there are a number of routes you can take.  They can be as simple as replacing a fixture or floors to as complex as expanding the size of the room.  In many cases, you'll be looking to hire a contractor to do the work for you.

Here are nine tips from Angie's List to help you hire the right remodeling contractor :

  • Know what you want:Before you begin talking with contractors, read remodeling magazines, search the Internet for designs and materials and put your ideas on paper to give potential contractors a better sense of your expectations.
  • Get estimates:Get at least three written estimates to review. Make sure the estimates include the same things so you're comparing apples to apples. Never hire on price alone.
  • Do your research:Check out contractors in your area using Angie's List and talking to your neighbors. Ask for references from your potential contractors and call those customers. Try to get a customer who's been in the remodeled home for several months so you can see how the work has held up.
  • Require proof of proper license, certification and insurance– if your contractor can't show that, get another one no matter how nice he or she seems. If your home is older than 1978 your contractor must be certified in lead safe practices – ask for that documentation as well.
  • Working with a General Contractor (GC): Get everything in writing from the GC, including the names of the subcontractors and suppliers. Ask your GC to provide lien waivers that show subcontractors and suppliers have been paid. Stay in touch with the subcontractors and make sure they're being paid on time. If possible, make checks out to both the contractor and subcontractors or suppliers, requiring two signatures to cash.
  • Read the contract BEFORE you sign:Make sure the job details, warranty, payment terms and penalties for not completing work are spelled out in your contract. Documentation is often the best ammunition you have if things go wrong.
  • Paying for the project: Expect a minor kitchen remodel to cost about $20,000 and a minor bathroom remodel around $10,000. Never pay the full cost of a project up front. Your payment schedule should be clearly spelled out in your contract. Tie payment plans to the job's progress. Most contractors will ask you to pay a portion of the project upfront – which is OK – but you can negotiate that down payment. Hold back the final payment until you're satisfied with the work.
  • Communicate with your contractor: Every project is going to have something unexpected pop up. To get the most cost-effective work out of your tradespeople, outline the scope of your project and establish a budget in advance. Make sure you are communicating your wants and needs directly with the contractor overseeing the project
  • Prepare for the stress/mess of a remodel: Regardless of size, all projects will include unexpected issues that may cost more or delay completion. Be prepared for stress as the project stretches on, work crews enter your home, materials may pile up, or you might have a few days without a working kitchen/bathroom.

"The reality of it is no matter what anybody tells you, you are going to be living in some sort of a war zone for a period of time," says Phil Gettum of Gettum Associates, Inc.  "We do our level best to keep it to a minimum. We do our level best to set the proper expectation so you understand what you are going to be working through. And it's important for us to all sit on the same side of the table so that we understand what we are going to do, and what we are going to do next so we can prepare the client for tomorrow they are not going to have a toilet from 9-4, some of those things. Preparation, discussion, complete understanding of the project as well as a guaranteed bottom line price for the things that can, in fact, be guaranteed."

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