Is your renovation budget realistic?

To set you on the right path for your renovation project, we asked MyHome Renovations for some expert advice:

We see homeowners make two major mistakes: they have unrealistic expectations of how far their budget will stretch and they have no idea of the costs to build in today’s environment. 

Here are some ways to help you get a handle on your renovation project and to make sure your budget is realistic.

Have a rough plan

Before you can start understanding the complex costs of your planned renovation, several details need to be determined first. 

You need to have at least a rough idea of what you’re after, know the quality of finishing you want and it also helps to identify anything that looks like it needs replacing or maintenance that has been previously put off for another day.

In older homes, the chances things like wiring, roofing structure and piling will need to be looked at is high. 

And if the new extension you are planning involves excavation, those earthworks can significantly affect the cost, especially if you have a sloped site or one with potential for rock.

Sketching out a plan of the renovation work you’re thinking of doing often helps. Even if that plan changes once you talk to an renovation expert such as MyHome, it can provide a valuable starting point for getting some cost estimates.

Without even a rough plan of what you are trying to achieve, you’ll be dealing with unreliable ‘guesstimates’ – even the most experienced building company will only be able to provide a broad cost based on average square-metre rates, and even those can be wildly misleading.

There’s more than just the build to consider

The cost of a renovation isn't just in the build. Design and consent costs also need to be considered, as do costs from specialists such as engineers, surveyors, stormwater and Geotech experts as they may need to be engaged to determine details specific to your project. 

It pays to research what these costs could be and ensure you include an allowance for them in your budget. They can quickly add up and add significant cost to the planning of your renovation.

Council requirements such as height-to-boundary, site-coverage rules, or drainage and vehicle access requirements can also add to the complexity of your project and therefore the cost of your build too. 

So, it’s important to bear these things in mind too.

Compromises may be necessary

Once you’ve scoped your renovation project and you have detailed construction plans and all the relevant building and resource consents, the real figures will start to emerge. 

Chances are there will be costs you hadn’t thought of, or figures that are much higher than expected. Unfortunately this may mean compromising – advice from MyHome Renovations is to focus on your must-haves and leave the wants for a later date.

A builder will always be more up-to-date on current building costs than a draughtsperson or architect.  So the best way to keep control over your renovation budget is to work alongside a builder through the planning and design stages. 

Look for building companies who have specific knowledge and expertise in renovations and offer a full end-to-end service so you have expert advice from start-to-finish. 

A contingency is key

At MyHome Renovations we always say ‘expect the unexpected’, and this is especially true if you own an older home. 

Non-compliant framing, rotten floorboards, wiring and plumbing from last century – all these surprises are usually hidden in the walls and are the reasons why a realistic budget should always include a contingency fund.

If you have engaged your builder on a fixed-price building contract, a contingency of 10-15% is recommended so you know you have funds available if the unforeseen is discovered. 

Under a charge-up/cost reimbursement contract however, your contingency will need to be more around the 25% mark, as the builder won’t have necessarily spent the time to determine all costs as carefully.

Plan for a successful reno

While you’re imagining that modern new kitchen, or the luxury of the addition of a master suite, it’s important to do some careful planning before you jump in the deep end of renovations.

Have a rough plan and do some sketch drawings. 

Decide how fancy you want things to be, and list out your must-haves. 

Consider your budget carefully – then add 10-25% as a contingency fund for the possible unknowns. 

And don’t forget council consents and design costs, building regulations and what you might find when the wall coverings come off or the carpet comes up.

But above all, choose the right builder – one with specific experience in the type of renovation you are planning, who can offer you not just a realistic estimate, but also an end-to-end service to guide you through the complex process of renovating your home.

Thinking about the cost of renovating? 

Talk to us at MyHome Renovations today.

Story by: Trendsideas