1
Dream. Dream simple. Recognize your needs and estimate the simplest solution. This project will quickly grow if you let it. Look at the money in your wallet/bank account and bid it. If you have a spouse, make sure you both have the same dreams. It's a lot easier to understand the sacrifices you're both making for something you both want than for one partner to make sacrifices for the other's enjoyment. And there will be sacrifices.
2
Research. Go to the library and look at magazines appropriate to your needs. If you need another bathroom, stay away from bedroom magazines. Stay away from color and textures. If you can make do with an improvement or conversion of an existing room, do so.
3
Draw. Unless you are competent at drawing, use graph paper and measure the room you're building/converting. This is to help you better express yourself. The people selling services and supplies can understand a 2-dimensional bathtub in a 5 foot (1.5m) wide room better than your description.
4
Talk to an electrician and a contractor about the construction cost. Ask for an estimate on each of the parts. If you can do drywall, then you can save money. Don't do roofing unless you already have the skill and tools required, at least. Don't do electricity unless you really can. High school science doesn't count. Look at the cost estimate and reconsider.
5
Hire an architect. For one room, it may not be worth it. But it won't be very expensive, either. Your city planning office will appreciate the architect's drawing. Part of the value of your architect is that he'll prompt your thinking about the project and offer ideas and suggestions you may not have thought of. A good architect offers a unique, critical and connected view of your project. Talk to your spouse about what the architect thinks and asks you. Also ask the architect for their thoughts on contractors, but know that the responsibility for the contract with the builder will be yours as the homeowner. Ask the architect what permits you will need and ask if s/he can assist you with getting them.
6
Go to the bank and apply for a loan for at least 10% more than you think the job will cost. Even if you are doing the work yourself, there are cost overruns.
7
Ask your friends and colleagues who have had work done to their homes about experiences with certain contractors. The loan officer may also be able to help with this.
8
Find out if your contractor or architect will be applying for building permits as well. If you are in the City, there is a city building permit; County, county.
9
Talk to several contractors about your project. Request a written itemized estimate for the cost of work, including labor and materials. Note that you may not wish to go with the low bidder, keeping in mind that price is not necessarily quality. Reputations are very important; that's why you were talking to so many people about contractors.
10
Contractors are usually willing to negotiate the price. If portions of the work seem easy, or within your skill range, you may wish to complete them yourself. It's also a wonderful feeling to know that you completed portions of the remodeling, assuming it is completed satisfactorily. Most people that are at all handy can hang sheetrock/dry wall (that white stuff that comes in 8x4 panels.
11
You may also wish to include in the contract provisions for completing before the rains begin. Or at least completing the roof before the rains begin. You will have to accept the responsibility of guessing the day for beginning rains. No reasonable contractor, except in Arizona, will promise to complete the work before it rains, but he should be able to finish before October 15, for example. For example, you may specify that the roofing will be complete by October 15th or deduct $5,000 from the cost. You won't get it free.
12
Hire a contractor. Schedule weekly visits with the contractor or foreman to discuss progress. You don't want to get in the way of the work, but you don't want something to progress too far before it gets fixed. This is where that 10% extra begins to disappear.
13
Inspect the work daily, after the employees have left for the day. You may wish additional electrical sockets, lights, sinks than was described in the plans. For most of us, the physical manifestation of walls is easier to understand than blueprints. Also, if something doesn't seem right, for example a bathroom vent has no outlet, tell the contractor within a day of noticing it. The more the work progresses, the more it will bury those little problems. The more the little problems are buried, the more expensive to fix.
14
Don't try to take advantage of the contractor, don't try to cut corners much. While you may have the money, the contractor has your home and you hostage. The best is that you both wind up happy with the outcome.
More here:
How to Remodel a House: 14 Steps (with Pictures) - wikiHow
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