Creating, managing, and sticking to a budget can be one of the toughest challenges within the home renovation process.
Emotions runs high, timelines fluctuate, and if you’re not careful, you can wind up spending a great deal more than you anticipated. There are some steps you can take, however, to safeguard yourself from reaching that point of no return.
1) Materials
Create your own materials budget before getting started.
Material purchases are the one aspect of the renovation process where you have a great deal of control. You get to choose whether you’ll lean toward the high-end purchases or the budget-friendly realm.
Take the time, perhaps before even jumping into the contractor interview process, to do a bit of research on the items necessary for your project. Create a concrete, draft budget that you can use as a guide throughout.
Be mindful of contractors who present ‘all-in’ renovation proposals.
Unless you’ve had a mutual discussion about the types of materials you plan to purchase, there is no way for a contractor to be able to make that financial assumption.
If, for example, your contractor has quoted a wonderfully low figure and you end up choosing those high-end materials, you’ll surely find yourself dipping deeper into that savings account.
A little pre-investigating on your own goes a long way, and always remember that if something appears too good to be true, it probably is.
2) Design Before You Renovate
Picking components is fun, yes, but you have to make sure they fit! Don’t go into a renovation blindly.
This might mean working with an architect or designer beforehand. Some contractors are extremely talented at the design aspect as well, if you’re looking to save the cost of adding extra personnel to the project.
Regardless, no one can build without detailed plans and if they try, tread with caution. You want your space to function and look amazing. If it’s done on the fly, achieving one or both is unlikely and you’ll certainly burn holes in your pockets.
3) Do Some Research
There will be moments in your process where your contractor will guide you with component choices.
Very often, this guidance is to your benefit as he or she likely has the experience to know such details as the durability and longevity of materials, dependable brands, companies that excel in customer service, and so on.
Understand, however, that your contractor is going to have relationships with specific vendors along with marking up the cost of materials.
Yes they want to help, but they want to make a living as well. You may find yourself in an instance where, for example, you’re being guided toward a $1,000 medicine cabinet where you might find an extremely similar one for $200. Thus, a little research can go a long way.
4) Pre-Purchase
Purchase items prior to starting your project. Time is money, and preparedness saves time.
Work with your contractor in ordering your necessary components well before the work begins. While you might be able to hold off until the end on cosmetic items, make absolutely sure your big-ticket purchases are in early.
Waiting on components simply equates to scheduling another day of labor to install them. Avoid extending your timeline and thinning your checkbook by having a solid purchase plan from the get-go.
Also, be absolutely sure to work with your contractor beforehand in clarifying who is responsible for deliveries, damages, and returns.
5) Stay on Track
Changing your mind costs money.
It’s likely that mid-project you will have a change of heart about something. Understand that this can add additional costs.
Making changes can mean placing more orders and shifting work schedules. While it’s certainly okay to make new decisions about your home, work with your contractor in understanding how they will affect your budget.
Avoid a plethora of change orders to help keep unexpected costs to a minimum.
6) Request Estimates for Unexpected Surprises
Creating a budget and having a contingency fund for your project is essential, but surprises do happen.
How surprises are handled will help in determining how much it costs you in the end. Strategize with your contractor on this.
Ask for complete transparency when it comes to unexpected occurrences. Then together, you and your contractor can discuss the various options that lie ahead.
Otherwise, you risk being handed a large bill in the end for decisions contractors made on their own.
While a contractor can give an initial estimate for your project, there is no ‘surefire’ figure you can absolutely rely on from the get-go.
By having a plan (and a concrete budget!), chances are you’ll get much closer to an ‘actual’ figure and, in turn, avoid many financial mishaps along the way. Prepare early and stick to your plan and you just might sail smoother throughout.
Brad Malow is the founder of BuyingNYC.com and an agent with Rutenberg Realty. He has been helping buyers and sellers navigate NYC’s complex real estate market for over 10 years.
