7 Hidden Renovation Issues That Can Derail Your Budget

One of the biggest advantages of owning a property is the ability to renovate it to your liking. Remodeling is an exciting chance to create your ideal living space, and it's also a smart way to invest your money. 

According to the Remodeling Impact Report from the National Association of Realtors (NAR), the return on investment for some home renovation projects can be 100% or more. But with every renovation project, there’s a chance of unexpected snags—which usually come with price tags attached. 

We’ve detailed seven common types of hidden issues associated with home renovations and some steps you can take to avoid them. Estimated pricing information is sourced from Angi’s Project Cost Center. 

Structural issues are one of the most common hidden costs for a home renovation. “You can open up the floors and find unexpected termite or water damage. Or you expect to find a support beam, but there’s nothing there,” says Shannon Kirsch, a sales manager at Lane Homes & Remodeling in Virginia with over 15 years of industry experience.

Some common structural issues include:

• Water Damage: Hidden leaks can cause mold, mildew, and warped wood. Water damage repair can cost between $1,361 and $6,270.
• Pest Damage: Termite damage can affect a home's structural integrity and cost between $1,000 and $10,000 to repair. For severe infestations, prices can reach $30,000 or more.
• Foundation Instability: Foundation repair typically costs between $2,218 and $8,112. Major repairs across the whole structure can cost $25,000 or more.

Homes built before the 1960s often have outdated electrical systems, like 100-amp panels or hazardous knob-and-tube wiring. Even in more recent homes, the electrical systems may not be up to code, especially if the home’s previous renovations were done without a permit. The extent of electrical costs might not be discovered until you get behind the walls.

Simple rewiring projects could cost $600, but large electrical system overhauls like knob-and-tube removal may cost as much as $36,000.

Outdated plumbing systems can lead to leaks, and in some cases, the whole system might have to be redone. Minor leaks may only cost a few hundred dollars, but major leaks could result in repair costs of up to $5,000 with drywall and flooring repair. Repiping a whole system typically ranges from $1,500 to $15,000.

The average lifespan of an HVAC system is 15 years. However, if you plan on adding rooms or changing your interior layout, the system may need to be replaced earlier to work with the renovation. A new HVAC system typically costs between $5,000 and $12,500.

Homes built before 2005 are likely to have insulation that is not optimized for energy efficiency. Replacing insulation is an added expense, but it can save money in the long run. Insulation costs are based on material type and usually range from $0.30 to $6.75 per square foot.

“One of the first things you should do to prepare for a renovation is talk to the local building department,” says Mim Ward, the owner of the Beams to Basement, a home improvement company serving the Colorado suburbs for over five years. “They will be able to tell you if your remodel is allowed and how to do it safely, which will save you from costly adjustments later on.” 

Most remodeling projects will require a permit from local officials to ensure your plans align with building codes. General contractors and design-build firms typically include that fee in their quoted prices. Without securing permits, you risk substantial fines for non-compliance. 

The fee for obtaining a permit varies by location and project type, with a typical range of $525 to $3,041.

Older homes tend to have aspects of their construction that don’t meet today’s standards. If your renovation affects those outdated aspects in any way, the permit inspector will want to see them brought up to code. “Pulling a permit can often lead to unexpected costs,” Ward says. “If we are working on someone's basement, and the fire alarm system is outdated, the inspector is going to want us to fix all of the fire alarms in the home.”

The cost of bringing a home up to code varies depending on what needs to be fixed. Some common examples include:

• Asbestos removal: $1,192 to $3,255
• Egress window installation: $2,714 to $5,884
• Knob-and-tube wiring removal: $12,000 to $36,600

The cost of materials can fluctuate during a renovation. A contractor might take on the responsibility for this risk by honoring their initial quote, even if the material gets more expensive. Still, it’s a good idea for DIYers to budget about 10% more than the estimated material costs to account for price changes. 

Many factors can affect the availability of a material, such as shipping issues, weather conditions or even geopolitical factors. But whatever the reason for the delay, it can result in additional labor costs, rescheduling or material changes.

“I am working on a kitchen remodel that went a few weeks over schedule because of issues with the granite countertops,” Kirsch says. “Typically, a design-build company will cover any extra costs associated with supply chain issues.”

The estimates from general contractors and design-build firms cover labor costs and often account for additional expenses that might happen if a project goes over schedule. However, labor costs can rise unexpectedly when you need to hire a specialist to address an unforeseen issue—like termites or a pipe leak. 

After the renovation, you’ll likely be left with a good amount of debris. Waste removal costs money and can significantly increase when hazardous materials like lead or asbestos are involved. Removing a truckload of waste typically costs around $700. Asbestos disposal costs vary across states but typically range from $10 to $50 per cubic yard.

• Hire a reputable contractor: A reputable contractor will often take on some of the risks associated with renovation. Their initial quote may not budge if material costs go up, the project is delayed, or additional permits are required. “The only time we adjust our initial quote is if the client wants a change or we find something outside the scope of the project, like termite damage,” Kirsch says. 
• Have a contingency fund: A contingency fund is a portion of the budget that accounts for any places where a renovation might have hidden costs. Industry-standard guidelines caution that 10% to 20% of the project’s overall cost should be set aside to address issues when they arise. Some contractors build this fund into their quotes.
• Do your homework: Check local building codes, arrange for inspections, and finalize a firm plan ahead of time—even if these extra steps add to your expenses. “Drawing plans and doing a site walk-through with your subcontractors helps you build an accurate estimate,” Kirsch says. “It’s a sizable investment of time and resources but is essential if you want to cut down on unexpected costs.”
• Avoid the creep effect: The creep effect is a phenomenon where homeowners feel tempted to keep expanding their renovation projects. For example, if you’re doing a bathroom renovation, getting your house repiped to fix your water pressure might be tempting. 

Hidden costs can arise at many points during a home remodeling project. Walls might conceal pests or leaks. Older homes might need things replaced or brought up to code. And the renovation process itself is expensive, from securing permits at the start to removing debris at the end.

No one can accurately predict the total cost of a home renovation. But with trusted professionals, advanced inspections and sensible contingency funds, you can feel confident that if something does come up — you planned for it.