Blog

Almost every renovation that runs over budget does so in the same places. After a hundred residential projects the pattern is dull, repetitive and entirely predictable, which means it can be planned for.

Here is where the money goes, in the order that surprises people.

The construction number is not the project number

Clients typically arrive with a figure they have in mind for “the work”. That figure is the builder’s contract sum, and it is usually about sixty to seventy percent of what leaves the bank account.

The rest is made up of:

• Design and engineering fees, ten to eighteen percent of construction depending on the amount of custom joinery
• Permits, plan check and any agency fees, which vary enormously by jurisdiction
• Furniture, lighting fittings, window treatment and rugs, almost never in the construction contract
• Appliances, often excluded from a builder’s quote and supplied by the client
• Moving, storage and temporary accommodation
• Contingency, which is not optional

Work backward from the total you can actually spend. If that total is four hundred thousand, your construction budget is nearer two hundred and sixty than four hundred.

The four lines that are always underestimated

Window treatment. Curtains, blinds and shutters for a whole house routinely come to more than the sofa. Made-to-measure curtains with decent fabric, lining and a track run to a serious number per window, and there are usually more windows than anyone counts at the start.

Lighting fittings. The lighting design is in the fees. The actual fittings are not, and a house needs far more of them than people expect once the layered approach is planned properly.

Electrical. Every renovation reveals wiring that should be replaced. Almost every one also generates thirty or forty additional outlets and switches once people start thinking about where they will charge things.

Tile and stone installation. Clients price the material and forget that a complicated tile pattern can cost more to lay than to buy. A herringbone floor is roughly double the labor of a straight lay.

The cheapest bid on an incomplete drawing set is the most expensive job you will ever run. Every gap becomes a variation, and every variation is priced after you have lost your leverage.

Contingency, said honestly

• New build or a straightforward refit: ten percent.
• Renovation of a building under fifty years old: fifteen percent.
• Renovation of anything older, or anything where walls are coming down: twenty percent, and do not let anyone talk you below it.

Contingency is not a slush fund for upgrades. It is for the rot behind the bathroom wall, the lintel that is not there, the drain that runs where no drawing shows it. On older buildings it gets used roughly four times in five.

If it is not used, you have a kitchen budget you did not expect. That is a much better outcome than the alternative.

Where to spend and where not to

Spend on the things that are expensive to change later: the plan, the structure, the wiring, the plumbing, the windows, the joinery, and anything behind a wall. These are decade decisions.

Economize on the things that are easy to change: paint, loose furniture beyond the primary pieces, accessories, and the second bathroom. Nobody has ever regretted buying a cheaper side table.

Allowances, and how they mislead

A builder’s quote will include allowances for items you have not yet chosen: tile at a rate per square foot, a figure for sanitaryware, a sum for ironmongery. These allowances are almost always set low, because a lower headline number wins the job.

Ask for every allowance to be listed, then go and price what you actually want against it. Doing this before signing the contract converts a series of unpleasant surprises into one uncomfortable conversation, which is a significantly better deal.

The last five percent

Snagging, touch-up paint, the second visit from the electrician, the piece of furniture that arrives damaged, the rug that turns out to be the wrong size. Set aside a small fund for the end of the job and the last month will be pleasant rather than fraught.