Once you’ve set the costs, make sure you stick to them, with the help of these tips from seasoned renovators.
You’ve scrimped and saved (or begged and borrowed) your way to a big renovation. You know that cost blowouts could leave you without all those nice-to-haves on your wishlist, or even derail your project completely. But how do you avoid them, and what’s the best way to keep your budget under control throughout the process?
Most people only go through a big renovation once, and learn lessons the hard way. Cherie Barber has just completed her 101st renovation, and offers expertise via her Renovating for Profit course, while Lana Taylor has revamped six houses in the past four years, including her own, as part of the Three Birds Renovations business she started with her friends Bonnie Hindmarsh and Erin Cayless.
BEFORE THE BUILD
scope the project
According to Cherie, the most important part of managing a renovation budget happens before the build starts. “The key is being super organised, and mapping out the whole project ahead of time,” says Cherie. This means diving into the detail of your contract with your builder to make sure you are both clear on what’s included. “A lot of cost blowouts are caused by variations to the builder’s contract during construction,” says Cherie. “If you go through your contract line by line before construction starts and clarify every detail of what the builder will be supplying, right down to the sizing of the skirting boards, you’ll minimise the number and cost of variations during the build.” Lana agrees that the devil is in the detail. “Ask a million questions about your quotes,” she recommends. “Your builder might be quoting for a standard cornice but you’ve always had a decorative cornice in mind. This cost could double if you overlook that detail and an extra $200 here and there can quickly add up. Don’t forget to budget for a construction clean [a thorough clean of the property once construction work is finished] – it may cost thousands so you don’t want it to come as a nasty surprise at the end.”
Opinions vary as to how much extra money you need to set aside for unforeseen costs, and it does depend on the size of your renovation, but it’s universally agreed that there will be contingency costs. “There will always be unexpected costs in a reno,” says Cherie. “No matter how experienced you are, there are some things that just can’t be anticipated. You should ideally have at least 10 per cent of your budget for contingencies, otherwise you’ll have to balance cost blowouts in one area by cutting costs in another.” You also need to be realistic about the likelihood that you’ll change your mind during the build. “We usually set aside 10 per cent for contingencies,” says Lana, “but for some people it might be wiser to budget for 15 per cent if they feel they’re inclined to make quite a few changes.”
DURING THE BUILD
Once you’re in the maelstrom of the building phase, it’s just as important to maintain a laser focus on the budget. This is the time when alternative design options might be explored on the hop, and your builder or tradies may suggest different surfaces or fixtures than what you’ve chosen. You want the ability to be flexible, without suddenly realising the project has slid into the red.
choose your captain
Even if you’re renovating with a partner and making all the decisions together, decide between yourselves who will be responsible for tracking and managing the budget. This reduces the likelihood that extra costs or bills will fall between the cracks, and leaves less room for recriminations later about who was meant to be doing what. “We’ve allocated Erin to be in charge of our budgeting,” says Lana of her business. “She loves a spreadsheet, whereas it’s Bonnie’s worst nightmare. With Erin as the budget owner, she doesn’t need to share her spreadsheet with us – she will just give us headlines at our monthly meetings as to whether we are on track or not. Her budgets are pretty detailed, with line items all the way down to the cost of a toilet-roll holder – yes, we even budget for that!”
set up your system
Whether it’s a Google Drive document, Excel spreadsheet, renovation tracker app or old-school folder, paper and pen, make sure you’re set up to succeed. This means having instant and easy access to the figures, and setting aside time to check and update the details. “With a big reno, you should keep one eye on the budget every day,” says Lana. “Set aside one to three hours each week to review the whole budget, check invoices against quotes and pay the bills.”
document the variations
It’s crucial that your contract covers the way in which changes are dealt with – or, if you’re working with individual tradies, that you set up a system with them upfront. “Agree to a process that any variation must be costed in writing for your approval,” says Lana. “Documentation is important here to keep track of all the changes, even the small ones. Write it all down!”
Need more help? Here’s a family who spent extra time during the briefing stage and got their reno just right: