4 tips for sticking to a renovation budget
Mon July 31, 2017
There are countless reasons to renovate a property. Maybe you want to alter the decor or layout of your home to better suit your needs, or perhaps spending a bit will allow you to demand a higher price when you decide to sell the property. Regardless of the reason, it's vital to set realistic goals for your renovations, both in terms of what you want to achieve, and how much you want to spend. The most essential tool for meeting these goals is a budget, and in this article we'll highlight a few ways that home owners can make sure they stay within their margins.
You'd be surprised how many people start the renovations process without working out how much cash they have to play with.
1. Set a budget
It might sound obvious, but you'd be surprised how many people start the renovations process without simply sitting down and working out exactly how much cash they have to play with. Setting a budget won't just give you a clear picture of how much you can afford to spend, it will also force you to think more clearly about exactly what you want to work on, and how much value it will add to your house. Thinking carefully about this makes it far easier to work out whether or not a particular job is really necessary - before you proceed with estimates and consultation fees from builders and architects.
2. Secure fixed-price contracts
When working out who you'll get to renovate your property, it's worth pursuing contractors who work on fixed prices. This will help you avoid spiralling costs if a job takes longer than planned, and make it much easier to stay within the boundaries of your budget. Some fixed-price contractors can appear more expensive than those who work on daily rates, but this is because they are accounting for the over-spend and delays that accompany so many projects. As NAB explains, "It could be worth the extra you pay to know exactly what you have to pay for up front (and make it much easier to stick to your budget)."
3. Include a buffer
When you're putting together your budget, it's always a good idea to include some sort of buffer. A renovation will almost always cost more than you expect, simply because it's so hard to predict any unexpected problems or delays that may crop up. NAB recommends a buffer of roughly 10 to 20 per cent of your total budget, which does seem like a lot. However, if you can make a concerted effort to stay under your overall budget, you'll end with a tidy handful of cash left over at the end of the process - allowing you to invest in additional renovations you may have had to shelve.
4. Choose between needs and wants
You want a new pool, but you need a new kitchen. Is there a difference between the two? Absolutely. When putting together your budget, you should split parts of the project into wants and needs, with the most important jobs falling into the needs category. These are the things that will add real value to your property when it comes time to sell - such as an extra bedroom or bathroom. We're certainly not saying that you shouldn't put in that outdoor waterfall if your budget can accommodate it, but if costs start to spiral out of control, cutting a few wants is a smart way to reduce your overall spend.
Regardless of the property you're renovating, Laing+Simmons can assist when it comes time to sell. Get in touch with our team to find out more.