How to Restore an Old Home on a Shoestring Budget

Obtain any necessary permits from your local jurisdictions. You don't want to spend the money to do work and then have to undo what you have done because you didn't get permits or permission from your city or county. Strict building codes are common for any electrical or plumbing work.

Do as much of the work yourself as you can. Major reconstruction and electrical work call for a professional, but you may be able to lay flooring or make other cosmetic fixes on your own. Check your local library for do-it-yourself books. Many local home improvement stores offer free classes several times a year on things such as tiling floors and faux finishing.

Act as your own contractor. According to Bank Rate.com, professional estimates of how much this will save range from 10 to 20 percent to as high as 40 percent of the cost of the remodel or rebuild. As the contractor, you are the point person in charge of the project who hires subcontractors to do the jobs you can't or won't do yourself. As you interview and hire your subcontractors, be sure you understand all the licensing rules that a contractor must meet for your state. For example, electricians must be licensed by the state to perform work, and in many states, plumbers also must have professional certification. You do not want to hire a contractor who doesn't have the appropriate state licenses, as he may not be qualified and you may set yourself up for potential liabilities. You will also need a good understanding of the proper order of jobs included in your restoration project. For example, electrical wiring should be done before walls are rebuilt.

Prioritize the jobs within your project and complete them over time. Everything doesn't have to be completed at once. Make the most of the specialists you hire. For example, if you are doing rewiring or plumbing, complete those jobs all at one time so you don't have to have the electrician or plumber come twice. Other jobs can be left until you have the cash. For example, Reader's Digest suggests you may want to install the plumbing for a bathroom but actually add the bathroom later, or wire for lighting fixtures and then put those fixtures up when you have the money to buy them.

Be creative in finding materials. Architectural salvage yards can be a great source of relatively inexpensive materials. If a home is going to be torn down in your area, contact the owner and ask permission to salvage items before it is destroyed. Habitat for Humanity operates ReStores where you may be able to find items you need while helping their cause of community improvement. Other sources for lower-cost materials are clearance sales at home improvement stores, eBay, and other online classifieds.