A remodel for a “Five Percenter.”—Trillium Architects photo

Home renovation is not for the faint of heart. But let’s face it, it’s not for the faint of pocketbook either. If you live in Fairfield or Westchester county, you can pretty much be assured that almost all of your neighbors fall into the top 10% household income level of the U.S. population. If your neighbor is the owner of a single-family home, you can be pretty sure he or she is in the top 5%.

Here is a quick refresher course on what it means to be a “One Percenter” in 2016. To be considered a member of the 1%, you would need to have a gross household income of $450,000 per year or more. If you look around our area, you realize that a number of your friends and neighbors probably fit nicely into the 1%. To be a Five Percenter you need a household income of $220,000 a year. That seems relatively easy to achieve in our neck of the woods with two people working. To be in the top Ten Percent you need a measly household income of $110,000, yet that is not enough for the average family to own a single-family home in much of Fairfield County.

The median-priced house in Fairfield County costs $422,000. The median cost of homeownership in Fairfield County is $2,263 and accounts for approximately 25% of monthly household income. Multiply that times 4 and your household would need to net $9,000 per month in order to meet the payments. If your household income is $110,000 and you pay the average taxes of that bracket, then you bring home about $82,000 per year, or about $6,800 a month. Not quite enough to afford that median house. You could probably get a small house in parts of Fairfield County, but you are priced out of much of the county.*

Now, if you think about not only owning a home but remodeling it or adding to it, well, that is a whole other set of depressing facts. Home construction in our area costs at minimum $200 or $250 per square foot. Adding a simple 1,000 square feet can cost easily a quarter of a million dollars, or the annual income of a Five Percenter household.

Why does anyone do it? Well, we do live in Fairfield County. Since a lot of us are actually Five Percenters or higher, we can find a way to afford it. The housing market has been pretty sluggish of late, but history tells us that it will likely come back eventually, and for many of us our home is our biggest investment. Improving it when the building industry is a bit slow (now) is probably one of the best bangs for your buck that you will get. Improve now and wait a few years. Watch your home value rise exponentially.**

Of course, it’s a heck of a lot easier to rip your house open and change everything if you are a One Percenter. If you are a One Percenter you don’t have to worry that much about choosing tile, or paying your starchitect. You may even choose to install tile and rip it out two or three times because it isn’t quite right before you finally sigh and say, “Well, it will have to do.” And then you might decide to do it all again, on a house you just picked up down by the beach. Why not? It was fun, and you finally have reached a firm understanding with your high-maintenance designer.

If you are a Five Percenter things might be a bit more stressful. You may have to give up on your ideal tile choice and go to Home Depot and try to find the most aesthetically acceptable tile you can find. Sure, you’re a poser, but you are still playing with the big boys. Most people who would buy your house would never notice. And if you like the tile, and your husband and kids don’t think you are nuts, that’s really all that counts, right?

For the average homeowner, remodeling is stressful because the money is tight. It always costs more than you think. So if you are considering “total home upheaval,” try get your head around the costs beforehand and go in with the right expectations.

You have to pay a lot of people money. If you look at them as percentages of construction costs they add up like this: architect 8%-12%, structural engineer 2%-3%, surveyor and/or civil engineer 1%-3%, permits 1%-2%. Those required people alone add up to about 12% to 20% of construction costs. So if you are spending $250,000 on the general contractor and your construction, you need to assume about $30,000 to $50,000 in additional costs. Do you really need all of those people? Pretty much. You can hire a design-build firm that can do a lot of the above in-house, but the costs simply transfer to that one entity instead of being dispersed among the separate entities. Your costs end up about the same.

Bottom line, it will all be OK! If you expect things to cost what they cost, then you won’t be surprised and your stress levels will be greatly reduced. You can still keep your purse strings tight and lower the cost of finishes and appliances, but you won’t save a huge amount. You will save maybe 1% to 5% — which is significant — but not huge. If you go into this believing you can cut your costs by 25% to 50%, the process will become an anxiety-fraught ordeal. You will have a heart attack every time you see an invoice, and you will fight with your architect and builder until they never want to see you again.

Statistics don’t lie. Try to take the coldhearted, logical approach. Crunch your numbers. Talk to your builder, architect and real estate agent. Assess the reality of your project. And then if it seems real, and your inner accountant gives the nod, go for it! Have a great time and find a tile you love (as long as it’s within budget).

*Statistics were gained from the U.S. census as well as a number of real estate sources.

**Caveat: Of course we have no idea what will happen with the real estate market. It’s anyone’s guess! But for those of us in the industry, we gotta have hope. Without hope what have you got?

Elizabeth DiSalvo is the principal architect at Trillium Architects and can be reached at [email protected]