Are you planning a renovation but worried about going over your budget?
Renovations can easily veer off course, causing homeowners to struggle with the frustration of financial stress. The culprit is often in the unforeseen changes which can have a substantial impact on the initial estimated costs. Many homeowners encounter this challenge, and the truth is—it's not their fault. Fortunately, there are several proactive measures you can employ to avoid this situation.
So how can you ensure your budget doesn’t blow out?
Set Your Expectations Before Commencing Design
- This is one of the hardest things to do.
- Everyone wants to know the cost before they design it.
- You won't get a quote but you can set realistic expectations
Talk to a builder who understands your project type. That is, if your project is a home renovation, a renovation specialist will be best equipped to offer insights from experience.
Professional builders have all the insights from their past jobs and should easily be able to bring up similar jobs to your and talk through the comparisons. This is where m2 rates can be discussed to determine realistic “no less than” targets for what you may be looking at spending
- A professional builder will be able to bring up examples of past projects and show you real costs for past projects
They will be able to compare your project scope to another similar build, and this comparison can help set expectations on what a realistic project spend would be for your home.
Provide a clear and realistic vision for the level of detail and finish you want in your home. This way, the builder can accurately estimate the costs for that level of finish and design accordingly.
- Set expectations on finishes and selections.
- With past examples of comparable jobs, you can see the level of finish that has been put into the home to be able to make that comparison as well.
- Fitout and selections can be a big part of your job cost
Find A Renovation Specialist
A builder who does new homes lacks the experience to adequately manage all the pitfalls and latent conditions that can be found during a renovation. This means that a builder who does not specialise in renovations will likely make mistakes in their quote, inevitably resulting in variations during the build. Meanwhile, a builder who specialises in renovations will follow a process where they are able to price the job to a point where they can provide a fixed-price guarantee. This will help you avoid builders’ variations from missed scope of work or latent conditions found on-site during construction.
The process for a renovation specialist builder to provide a fixed price guarantee means he has to be able to understand the job fully. This means all the nuances and specifics of your site need to be fully investigated during the quoting process. Sub trades need to see the site conditions to be able to provide their fixed pricing. Little things like if a plumber is going to be digging a new trench for some pipes and there is nowhere to put all the soil, the process can take up to 2-3 times longer than if it was a vacant site for a new home.
A renovation specialist knows all these pitfalls and will follow a process like so:
- Investigate the site with his building team and estimator
- Book site visits with the trades for further review
- Review all the documents and plans and speak to the engineers and consultants
- Request further information from you to determine the scope of work and level of finishes
- Document a full building schedule to understand how long hire items need to be on-site for
- Build a detailed contract proposal with specification and inclusion list specifically itemising excluded work so everyone is on the same page
Define And Commit To Your Scope Of Work
This is the biggest mistake most consumers make. Changing or adding the scope of work halfway through the job
It is very common for the first round of costings on your set of plans to be higher than you wanted. The next step from there is to talk through the scope of work and look for efficiencies or compromises in the inclusions. This is where we can cut back on the scope of work to get the desired project price. Then we sign the contract
What happens next is the biggest mistake all consumers make. They start to add a lot or all of the work that was removed from the contract, back into the scope of work as variations. This causes delays in the project and adds additional costs that usually outweigh what was in the job from the start.
Our advice is to always decide on what you want in the job, accept the price and don't change your mind.
Indecisiveness and scope changes mid-project are the biggest factors for cost blow-outs. Untimely client variations affect the cost and will negatively impact the timeline. Subsequently, delays will require more project management time, more toilet hire, more scaffold hire, and so on. Making changes in the scope while the build is ongoing can cause an abundance of issues.
These inopportune modifications lead to blown-out timelines and inflated materials and labour cost among others. This is the biggest tip of all: Stick to the project scope and don't add more halfway through your build.
Keep in mind that your budget isn’t blown until it blows out after you have signed the contract. If you're planning a renovation project and want to avoid blowing out your budget, download our FREE guide "Six Essential Things You Must Do For A Successful Home Renovation". Our guide provides practical advice to help you plan and execute your renovation project successfully.
