The 5 Biggest Hidden Costs of Renovating Your Home
You’ve decided to renovate — finally! You have oodles of great ideas, a few builders in mind and your budget sorted. What could possibly go wrong? Well, lots, as it happens. Hidden costs can crop up at every turn, and it’s vital to go into a renovation informed and financially prepared. That includes understanding all costs from the very start, according to architect Scott Weston, owner of Scott Weston Architecture Design.
“If a client says, ‘I have $800k to renovate,’ I always ask if that’s their building budget, or their entire budget — including everything from council fees and architectural costs to appliances,” says Weston. “Their eyes widen when I start deducting the hidden costs, which can be around $150 to 200k, from their overall budget!” Here are six things worth planning for in a large renovation.
1. Variations During the Renovation
You’ve negotiated a fixed-price contract with the builder, but that doesn’t account for unforeseen costs during the build.
“It’s very difficult for an architect to document everything, including things you don’t necessarily see on a set of plans or in a couple of site visits,” says builder Bill Clifton, director of Robert Plumb Build. “It’s only when you start taking plasterboard off walls or pulling up floors that you can discover termite damage or damp — and these turn into what are called ‘variations.'”
So, even with a fixed-price contract, you may have variation costs on top, plus the builder’s margin. An architect will try to make allowances for areas that may be hard to quantify — and you should quiz the builder about issues that may crop up, factoring in these at the start and ensuring you have a reasonable contingency buffer.
It’s much better to be informed. “You hear horror stories of builders not even mentioning variations until the end, so you think you’re all paid up, and suddenly there’s another $80k to pay!” says Clifton.
2. Delays Due to Disorganization
This is a biggie because, on a building site, time is money. “You want to have all your documentation complete, all your fixtures, fittings, and finishes specified,” says Clifton. “So when the builder starts, he’s got clear plans, clear direction, and there’s nothing slowing him down. You need to have all that in order to make rapid decisions.
“If you have a build where one part hasn’t been designed by the architect yet, or the client hasn’t thought about this bit, or decisions can’t be made for a few weeks, the more it costs. My biggest piece of advice if you’re renovating would be to be organized!”
3. Buying From Your Builder
A hidden cost most people don’t really understand is the 20-percent margin placed on items such as fixtures, fittings and architectural joinery bought by the builder.
“Things like lighting, carpets, tiles, and [taps] — everything imaginable that you can buy for the home — can be bought through the architect’s trade suppliers,” says Weston. “But if the builder buys all that for you, he’s going to put a markup on it. You’ll save money if you buy direct via the architect’s trade suppliers, [though] you do need to negotiate with the builder for a cost to coordinate or project-manage the joiner, and accept and store the items.”
4. Not Scrutinizing the Contract or Asking the Right Questions
Builders’ quotes can vary significantly, which means it’s important to read the contract and the full bill so you can see what’s been allowed for.
“Engaging your architect to review and compare builders’ quotes is a great way of ensuring that you’re comparing apples with apples,” says Clifton. “Having designed the renovation, the architect is across the job and can identify areas where the builder may have over-allowed or under-allowed for something, and help them identify a particular trade that may be susceptible to variations if the prices vary greatly.
“You should also speak to a couple of architects the builder has worked for, and some clients they’ve built a house for in the previous 24 months. Ask how far over-budget or under-budget it was, what the experience was like, and if the builder has been good at coming back to fix things since the job finished.”
5. Accommodation and Storage
Are you convinced it’ll be fine to live on site during the build? Think again. You’ll just delay aspects of the project, and on most big renovations, it’s not possible due to the noise, dust, and lack of utilities.
“You have to factor in accommodation costs and allow for a contingency beyond the date of practical completion, as things such as wet weather, subcontractor setbacks, and materials not turning up on time can delay the work,” says Weston.
You’ll also want to allow for storage costs for your furniture and belongings, the cost to move out and/or move your stuff to storage, as well as boarding costs for any pets during the build.
This article originally appeared on our sister site, Homes to Love.
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