Five Tips For Keeping Your Renovation On Budget
There are always budget surprises, good planning helps minimize the change orders.
Even the most experienced renovator has run into cost overruns. The key is to keep any cost overruns to items that couldn’t be seen when you started the project. Although it’s not one of the Five Tips For Keeping Your Renovation On Budget, a contingency budget is essential for planning your project. A contingency budget of 10% of the overall project is a safe bet.
Your current home value and project home value when the project is completed are key factors when determining your budget. You don’t want to price your home out of the neighborhood with extravagant kitchens, baths, or an addition that has a low return on investment.
Dan DiCleric, a smart-home expert for HomeAdvisor, a home improvement platform in New York City says, “You should spend about 5 to 15 percent of your home value on kitchen renovations. So, if your home is worth $300,000, you should spend $15,000 to $45,000 on the kitchen. A bathroom renovation should cost about 3 to 7 percent of your home value.
Tip 1 For Keeping Your Renovation On Budget
Construction Debris, Removal and Disposal
You’ll be surprised how much debris comes out of a remodel or flip. Add in soil removal and you can get way out of whack on dumpsters. Our most recent project we estimated $1,000 for dumpsters. It ended up being $1,800. We had decided to dig the crawl space deeper for ease of access and connecting to an existing cellar. Three 30 yard dumpsters with nothing but dirt ran our dumpster budget up fast.
Green Tip: Separate metal from your debris. We get metal collectors who drive around renovation dumpsters who are all too eager to recycle your materials.
Tip 2 For Keeping Your Renovation On Budget
Adding windows: vinyl, wood clad, fiberglass.
We find ourselves replacing a lot of windows. Windows can get quite pricey so choose wisely.
Vinyl windows have improved dramatically over the last five years and are perfectly fine for many applications. When appropriate we choose to use wood clad in aluminum. Be sure to understand the warranty of any window you purchase. We also like upgrading the window screens to a more transparent style similar to Anderson Windows Tru Screen. Nearly every manufacturer has their own brand name for this type of screen. Generally it is an upgrade from the standard fiberglass screen window.
Increasing the size of a window or adding a window can significantly enhance the aesthetics of a room and add value to your home. Again, plan your windows wisely. Furniture placement makes a difference as well. In the picture below, the window grouping and location was based on a king size bed and the headboard height. Tip of the day: Don’t forget to frame a view if possible or move a window to hide an unwanted view.
However, there are times you just can’t see the advantage of adding a window until you get the room down to studs. Aside from the additional window cost, there is framing and what to do with the exterior when you make the change. Keeping your renovation on budget requires a lot of advanced thinking about adding or replacing windows. They can have one of the most significant impacts on your home if done right. Spend the time to research windows. Go look at windows. Windows and doors are always worth spending a little extra on if you have the budget.
Tip 3 For Keeping Your Renovation On Budget
Updating the mechanical systems
Rarely do we come across a project where the water heater is new enough that you don’t touch it. Here’s the conundrum, do you replace the 40-gallon tank ($700+ installed) or go with a tankless option that is both green and a luxury ($2,500+ installed).
When possible or necessary, we are installing tankless water heaters. Not having a big tank that has to be heated all day everyday seems like an unnecessary expense, not the greenest thing to be doing, and some utility companies offer rebates. The best part of the tankless systems is the pure luxury of being able to take a hot shower un-interrupted by dishwashers, laundry, or other members of the household. This feature has become very popular with home buyers today
We had planned on restoring the fireplace pictured below. However, after removing the mantle we discovered that there was an active vent in the fireplace. And not vented very well at that.
This little discovery led us to replacing our 40 gallon water heater with a Rheem tankless water heater. The budget took a $2,500 unplanned hit but fortunately we hadn’t touched the contingency budget at the time. Yeah contingency budget. We estimate the energy savings to be about $75 – $100 year, plus we got an energy rebate. There are pros and cons to going this route and you should do your research before choosing. The picture below is how the wall got finished. We decided to not replace the fireplace because the room was somewhat narrow and we would rather have extra walk space. The paneling matches the rest of the room.
Tip 4 For Keeping Your Renovation On Budget
Create built-ins and nooks
As often as possible we add built-in cabinetry. It creates out of the way storage and we love the look of it. So do home buyers. We almost always use pull out drawers on our lower kitchen and bar area cabinets. Much better access, actually creates more space, and they look great.
The best part about creating built-ins is that there is almost always a place in the home that could benefit from extra storage space. It also saves on the need to purchase furniture, thus adding to an uncluttered space.
Tip 5 For Keeping Your Renovation On Budget
Controlling Contractor Cost
Since we manage the subs on our projects this tip assumes that you too will be managing your subs.
Unless you get a great referral on a sub, you must check out a potential contractors their past jobs and ask for a references. It is everything in setting the tone of the relationship you’ll have with your sub contractor. You have the vision, the plan, and the checkbook. So set your expectations early.
Get it in writing. There are too many moving parts to live and die with verbal agreements. Decisions get made on the fly some days. Always make time to record a conversation via an email with your sub or better yet a signature on a document or change order.
There are times that you can do some of the work and help save money. Discuss this with your subs.
Plan. Schedule. Monitor.
If you have to order materials, be sure you order early and plan for delays. Having materials on the job site ensures you don’t get pushed out of rotation with a sub. Every project has an order to ensure scheduled completion. Planning the order and time frame for framer, plumber, electrician, drywall, flooring, finish trim, painting will ensure you hit your timelines and it holds the subs accountable for their commitment.
We use a spreadsheet for tracking progress and anticipate changes or delays. We also track all of our expenses per sub which enables us to project renovation cost for future projects.
Payments and Punch List
You’ll work out a payment schedule with your sub. Never pay for the entire project upfront and always get a written estimate. Depending on how long the sub will be on the project you may pay 25% – 30% to start the job, 25% half way through and the balance due and the completion of the final punch list.
Creating a punch list ensures that all work was completed in a professional and workman like manner, meets applicable codes, and is finished in a manner adheres to modern construction standards. After you submit your final punch list of items to be completed review with your sub and set a completion date. Again do not pay until the punch list is completed.
Feel free to call, text, or email with questions about your project. We’re always happy to share our experience.