A kitchen, bathroom or whole house renovation can provide years of enjoyment and an excellent return on investment when done properly. When considering a project of this kind, budget is an important factor. Unfortunately, the manner in which many homeowners approach their renovation budget is very misguided.
Here’s how many homeowners approach home renovation budgeting:
Guessing at the Cost: With little completed in the way of design or planning, the homeowner estimates the cost of the project based on what they loosely know, have heard from friends or HGTV, or gleaned from reading a few articles online.
Get Quotes: With a rough budget in mind, they call several contractors to ask for quotes. A brief description of the project is provided to the contractor, but no real design or planning work has been completed. By seeking quotes, rather than help with design, the homeowner unknowingly begins to attract contractors who tend to shortcut the critical design and planning work necessary to define the project.
The homeowner ends up with estimates from various contractors who all have different ways of doing business. The level of detail included in one proposal often differs significantly from what is included in another. It’s difficult for the homeowner to be sure what should be included. This often leads to confusion and frustration. Many homeowners will then choose the contractor who seemed the most knowledgeable, was the friendliest, offered the best price, or the one who simply showed up! The homeowner proceeds with the project and hopes the contractor can deliver.
Disappointment: As the project progresses, the contractor and homeowner discover many unforeseen costs due to lack of planning. This can lead to mistrust, finger-pointing, and a breakdown of the relationship. If the work gets completed at all, it is often well over-budget, or reflects poor workmanship resulting from the contractor attempting to reduce costs as he or she realizes they’ve underestimated the amount of work.
Everything about this process is wrong – everything from getting generic cost insight from random online sources to the process of collecting quotes from contractors who have limited design and planning skills. What’s worse is that the internet is full of articles that support this process.
In part two of this series, we’ll dig deeper into the correct way to plan and budget for a major home renovation but first let’s take a closer look at some common misconceptions about setting a renovation budget.
Misconception 1: The Internet, HGTV, and Your Neighbors, are Good Resources for Determining Renovation Costs
We’d love it if every renovation project went as smoothly as a sitcom with a few commercial breaks. But real-life renovations aren’t scripted and financially backed by a big production network. These shows are very misleading about many elements, but budgeting in particular. As a viewer it’s impossible to understand the planning that went into the space before cameras were rolling. It’s difficult to assess the quality of the materials or the craftsmanship behind the work. It’s easy to make a room sparkle for the cameras, but that doesn’t mean it will last for years to come.
Obtaining budget insight from friends, neighbors or the internet can also be misleading. Remember, every project is unique. Tastes, preferences and budgets tend to vary significantly from one family to the next.
Misconception 2: Using a Cost Per Square Foot Formula
Cost per square foot is a terrible way to budget for most residential renovation projects because this method ignores the many factors that make each project unique. The cost of your remodel can vary widely depending on the type of features you want to include, quality of the finishes, existing conditions and many other factors.
Also consider that rooms such as a bathroom pack a lot of elements into a small space. The cost per square foot will be much higher than that of a basement for example. As a design-build contractor we never recommend using cost per square foot as a starting point to set your renovation budget.
Misconception 3: Assuming Small Spaces Cost Less
Many clients begin conversations with a contractor by explaining how their space is small, implying that their budget expectations are set accordingly.
We can design a small luxury kitchen that costs far more than a spacious, economy-grade kitchen. So, ignore the overall size of the space and start to think about what you need from the room to make it function for you and your family.
Misconception 4: Assuming You “Don’t Want Anything Fancy”
The concept of “fancy” is extremely subjective, and it varies from person to person.
Rarely have we come across a client who, when given the choice, always selects economy-grade features and finishes.
Just because you don’t need a $10,000 Sub-Zero refrigerator in your kitchen doesn’t mean you want a $349 no-name brand. There are many options between the no-name brand and the top-of-the-line choice, which is true of most fixtures and finishes. A contractor, if they’re experienced, won’t assume that you’ll always choose the most budget-friendly options.
Misconception 5: Contractors will Provide Reliable Quotes for Free
If there’s one habit we’d like homeowners to break, it’s the idea of collecting free quotes or estimates for major home renovations. Homeowners often seek a dollar amount early in the conversation. While this is tempting, it’s a very bad habit. It attracts the wrong type of contractor. The type that often takes shortcuts and is willing to guess at costs in order to win a job. The type that is happy to accept a deposit check today and then worry about how to do the work later.
If you want to truly understand the cost of your renovation, first invest in design and planning. Design and planning work results in clear specifications for the job to be done. Design-build contractors provide this service, but many general contractors do not.
Once a design is complete, the true cost of a project can be determined. When done right, this work will not be performed for free. Proper design and reliable budgeting take considerable time to perform properly. The most established and professional companies expect to be compensated for their time and expertise.
Now that you have a clearer understanding about the misconceptions of renovation budgeting, be sure to read part two in this series where we explain a better approach to these projects.
Interested in discussing your upcoming renovation project? Contact Advance Design and Remodel to request a consultation.