Creating a renovation budget: 3 Steps to ensure success
While creating a renovation budget is not rocket science, it does require skill, knowledge, and manipulation. Ensuring the task list is checked off (known as labour) as well as making sure the functional design is pretty (known as the sourcing), these two key elements are essential to a successful, on-budget renovation.
While it is very common for clients to not really have a good grasp on what things cost, clients do have a very good idea on the investment they wish to make in their home. For me, I really need to know that upfront so the design plan is falling in line with their investment.
Renovation Budget - Step 1 Labour Quotes
When it comes to a renovation budget and managing a renovation, the first step I always carry out is getting quotes from the trades. This is known as the labour budget. When the design is all planned out, it is easy for the trades to work off the plan to provide an accurate quote.
I ALWAYS get labour quotes first as it is typically a good chunk of the budget. As I tell my clients, labour is really non-negotiable. While my trades provide me with very competitive pricing, there really isn't a lot of wriggle room in the pricing of labour.
Renovation Budget - Step 2 Sourcing Quotes
The next step that I look is at the sourcing budget. I already have a total cost for the labour so I know how much my 'pretty' budget can be. This is where I either work closely with the client to make selections that fall within the budget, or I provide options for my clients that I present to them, that will fall within the budget.
There may be areas where we wish to 'splurge' while there may be other areas where we can 'pinch'.
Renovation Budget - Step 3 Finalizing the Budget
This is where 1 + 1 = 2. I put the labour budget together with the product budget which will give me the overall budget for the project.
Labour + Product = Full cost of the renovation.
When the renovation budget is too high?
If the overall budget comes in higher than what is expected, we have choices:
- Increase the budget to get it all done.
- Reselect product to come in on budget.
- Investigate the scope of the project to see where some work can be cut from the project.
Renovation Budget: Bye Bye Basement Example
I am currently working on a project that I've called 'Bye, bye Basement". For my clients, I am developing their basement in order for them to sell their home. Based off of the real estate agent's comments, the home will sell quicker if the basement is developed.
When I met with my clients, we walked through the basement and discussed some possible ideas.
In the original plan, we talked about making the entire basement fully finished, which included a separate mechanical room/furnace room, laundry room, bedroom, bathroom, open family room, and a storage room. Here was the original plan:
Some heavy price-tag items on the list were:
- Move the hot water tank to be closer to the furnace. As the basement sits now, the hot water tank is in front of the furnace.
- Move the plumbing drain from the centre of the space to the mechanical room.
- Clean up the electrical panel.
- Add a sub panel.
- Create a stub wall for the laundry room and finish off the exterior wall where all of the electrical sits.
While there were other items on the list for the electrician and plumber, the list was extensive for both trades.
When the labour quote came in, it was way above what my clients wished to invest in their basement development. So, we went back to the drawing board with the design.
Since the home is an older home, and making sure the new homeowners have access to the plumbing and electrical, we have decided to create one larger laundry room/mechanical room. The cost to move the hot water tank, plumbing drain was coming in at around $2500. That was something that was easy to take off the list without compromising the rest of the basement.
IF my clients were going to stay in the home, we would have proceeded with that option. Since they are getting ready to sell, we will still make the laundry room/mechanical room nice and tidy, but it will be an unfinished room.
We were able to make some other smart, budget choices to come up with the final design plan for the basement. Some minor changes that make the budget work include a smaller closet in the bedroom and no built-in storage units in the bathroom (clients will use existing storage units in this space to stage the home).
Renovation Budgets: Making Smart Decisions
When it comes to renovations, I would love to give all of my clients everything on their wish list and give them their dream. The reality is, we often make compromises. I want you to not think of that word as a swear word. While you may have to make some compromises, the end goal never changes. The goal is always to create a new space that clients will love for many years!
Thinking of an upcoming renovation and wish to discuss your options? Contact us today to chat about working with us!