Nailing down renovation costs is like asking the length of a piece of string. The answer will depend on the size of your project, the level of finishes and unexpected problems. The first step is to determine how much you can afford or want to spend, followed by working with a designer and builder to establish how that money can best be used to achieve your renovation goals.
“Getting a fixed price quote from a builder as early as possible in the design stages of your project is essential,” says Steve Burke, builder and co-author of Nail Your Renovation Without Getting Screwed. “There is no point falling in love with a design, only to find when it is fully costed that it far exceeds what you can or are willing to pay.”
Wants versus needs
It’s important to establish your needs versus your wants and to make budget decisions accordingly. “Generally it helps to understand why a client needs their home renovated,” says Steve. “Is it because they are about to have a baby? Or they have teenage kids and need more space?” This can help you decide what is essential now and what you can live without.
Nicole Cox, building company owner and blogger, agrees that compromise is crucial. “Any large items that could be built at a later stage could be left out for now; for example, a pool, carport or shed,” she says. How much? As a general rule of thumb, the more complex and detailed your project, the more it will cost. Many renovators are surprised to discover labour is a major cost component of building jobs. The fixtures and finishes you select will obviously affect your budget and can be a good place to save money. For example, you could spend less by specifying aluminium windows instead of timber, tiling to half height rather than to the ceiling in the bathroom or opting for mid-range kitchen appliances.
Should you stay or should you go?
As well as the project’s cost, you need to consider whether you can stay in your house throughout the build. Living in during renovations can be stressful, so you may have to factor in the cost of a rental property and, potentially, furniture storage. Every renovation (especially those on older houses) will have a surprise or two; it could be rock where you wanted to dig a pool, wiring that needs a complete overhaul, or structural members that aren’t as strong as they should be. Having money set aside – ideally about 20 per cent of your budget – for these situations means you can keep the project moving and won’t miss your timeslot with each trade.
Set a payment schedule
Knowing when you need to pay your builder is another important aspect of managing your budget. “When signing a contract, clients will be given a payment schedule,” says Nicole. “This will outline the process by which the builder will be paid throughout your build and typically will involve a deposit, then payments at slab/base stage, frame stage, lock up, fit-out and practical completion.” Each stage is paid with a percentage suitable to the build costs of that stage, and before payment is made you should undertake an inspection to ensure the work for that stage is completed.
“Many custom builders will allow you to source and pay for trades like tilers and painters, which means you can save the builder’s margin. But your builder won’t be responsible for the quality of these trades’ work” Nicole Cox.
Build your budget
Well there you have it, some simple tips that will help you set up your renovation budget.
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