in the five weeks since we closed on the crack house:
1.Unless you're a skilled contractor, don't do it yourself. Don't even think about it. It's extremely likely that you'll have to pay someone to undo everything you just DIYed, which will be costly and embarrassing.
2.Don't live in the house while the work is being done. It will cost you more in the long run than paying two mortgages or renting. Contractors don't want to have to work around you and your stuff. You don't want to pay them to clean up the same mess day after day. Plus, the noise and dirt and dust and bad 70s rock will drive you insane. Stay the hell out until they're done.
3.This ought to be obvious, but apparently it isn't (at least not to everyone): don't do anything that doesn't add value to the house. That's really the cardinal rule: everything you do should make the house worth more to a potential future buyer, even if you plan to live there for the next thirty years. We actually figured this out some months ago, while observing a home renovation disaster being perpetrated by friends of ours who shall remain nameless. They're $80k+ into a mostly unfinished project, they've run out of money, the house is barely habitable and it's worth considerably less than it was when they started. A nightmare.
4.Beware that which is trendy. Remember all those knotty-pine basement dens from the 50s? That's your kitchen island.
5.Round up your contractors early (otherwise, if they're any good, they'll all be booked). We had our lead guy signed up weeks before we closed. If you're on a tight schedule, it's the only way.
6.Figure out how much you can spend, and add 30%. We actually caught a few breaks (touch wood)—the initial 2nd floor renovation cost less than our contractor originally estimated, we didn't need a new roof, and nobody thinks we need to completely re-drywall the third floor rooms; total savings of $16-20k. We also "saved" about $10k up-front by deciding not to go with geothermal heat (I'm a bit sad about that one). So, are we banking our savings on the project and figuring we got away cheap? Um, no. We're putting in a fancy kitchen instead, which will end up costing us more by about half than the $30k we "saved." The psychology is, once you've set aside a chunk of money to spend on fixing up your funky-ass old house, no matter how the project unfolds, you will never spend less than that initial amount. For all intents and purposes, it's spent (and then some) the moment you name a figure: you'll never see that money again except in the form of range hoods and window treatments. But again, what the hell—where else are you going to put your money these days?
7.When minor disagreements crop up, defer to your wife. She's smarter than you, and has better taste.