Let us start by stating a fact: Your home renovation will cost more than you think.
Renovations are typically variable, so if you don’t plan your steps carefully, the costs can easily add up. And next thing you know you’re faced with a bill you’re not ready to handle. It could become a major financial setback that could put your family and relationship into peril. In extreme cases, it could lead to marriage break-ups or even bankruptcy.
Whether your renovation project is grand in scale or modest, success lies in smart planning.
How to plan
You usually take on a renovating project with a vision in mind. But when you start thinking of all the work involved, it’s hard to know exactly where to start. For this reason, it’s recommended to enlist the help of a renovation specialist early on in the process. A professional can help guide you through a project that is realistic for your budget, whilst taking into account your needs and priorities.
If you plan to take on the project by yourself, make sure to spend as much time as needed to figure out the exact costs of the materials you need. Consider things like shipping fees and the time it takes to finish each part of the renovation. Take note that paint needs drying, cement needs curing, etc.
- Find out how much renovation costs in your area
Materials and labour costs vary widely depending on location. As a rough guide, the cost to renovate per square meter in Auckland ranges from $1,800 to $2,500. Anything over $3,000 is a prohibitive cost, which means you won’t likely recoup it in terms of added property value.
For a small bathroom restoration (about five square meters), you’re looking at $7,000-$10,000 depending on the materials you want and whether there’s plumbing involved. Meanwhile, a medium-size custom kitchen renovation starts at $10,000 for basic design, $20,000 for mid-range and $30,000 for high-end. Kits are cheaper to install, but a custom kitchen allows you to make the best use of your space.
As mentioned, your renovation will cost more than you think. This is because homeowners tend to only account for the big-ticket items, key materials and labour. It’s easy to overlook small things like sandpaper, paintbrushes or hardware, much more so the extra electricity and utilities used during the renovation. The longer your project takes, the higher your utility bills go. And all these little costs add up.
- Figure out how much you can afford to spend
Are you paying it in cash? Are you taking out a loan? Whichever way you pay, be sure you are at a price range you’re comfortable with. Rather than taking out a huge loan for an epic renovation, it makes more financial sense to alter your plans to fit your budget. Believe it or not, there are ways to achieve a particular home style or vibe. An expert would know which materials you can swap to cut your costs. But if you are to make extreme changes, anything that improves your quality of life (i.e. air conditioning, insulation, heating) should take priority over aesthetics.
- Be aware of potential pitfalls
Other things that can easily drive up renovation costs are last-minute changes, accidental damages and forgetting to take measurements. These are common with DIY jobs. For example, you find out halfway through the project that the material you ordered doesn’t fit in your original design or doesn’t actually suit your taste. Or, when your new appliance arrives, you realise that it’s too big for your space. While you may be able to simply return some of these items, you might end up paying additional shipping fees or buy new ones to fit your renovation needs. This could also lead to costly delays.
These mistakes may happen, so be sure to set aside ten percent of your budget to cover for these situations. As with accidental damages, the bad news is they won’t likely be covered by home insurance if they were caused by your renovation. On the other hand, if damages were caused by your contractor, the company will cover it.
- Give lots time for it
Just as you would set aside a contingency fund, make room for unexpected delays for your renovation. Be realistic about your expectations. It will save you and your contractor a lot of stress and disappointment when things move slowly than anticipated.
- Quality costs more
High-quality materials will cost more and skilled renovators charge higher than less experienced ones. Of course, you don’t have to get the most expensive items from a range. But you have to be prepared to pay more for that high-end finish.
The key to renovating your home beautifully within a budget is to have a clear goal in mind and to keep the communication lines open with your renovation company – leverage their expertise and experience to avoid costly mistakes.