What I wish I’d known when budgeting for a renovation

Here’s what we did that worked, along with things I wish we’d known before we started.

Create a detailed budget and revise as you go. In our case, we were working with a contractor and an architect. The contractor’s fees included some materials (including paint) but not most fixtures and finishes—that’s the grab-bag term for tile, flooring, countertops, kitchen cabinets, faucets, lighting, door knobs, appliances and more). We made a room-by-room spreadsheet of all the things we’d have to buy, and then did initial research on prices. We labeled that column “Budget.” As the project progressed and some of the prices seemed too low or too high, we adjusted them in a column called “Projection.” Finally, as we ordered each item, we filled in a column called “Actual.”

The three columns let us create a budget, revise it as we went without losing sight of our original plan, and track the amount we actually spent. We used a similar system for keeping track of what we paid the contractor and architect over the course of the project.

Don’t forget taxes and shipping. When you’re researching costs for your initial budget, it’s easy to forget additional costs. Especially if you shop online regularly, you may be used to free shipping. But, counter-intuitively, lots of major purchases you’ll make for your renovation have serious delivery fees. And while taxes are relatively palatable on, say, a $100 pair of jeans, the taxes on $3,000 worth of kitchen cabinets makes them cost $270 more. I wish our budget spreadsheet had included a column automatically adding 9% for taxes and $100 to $500 for heavy deliveries, like cabinets, tile and appliances.

Plan for budgeting mistakes. No matter how much research you do, your renovation is likely to include costs you didn’t anticipate. In our case, hours of reading about countertops didn’t reveal that fabrication—the process of templating and cutting a slab of marble to fit our specs—is a separate, and mightily expensive, cost. It made the counters, already a splurge item, nearly twice as expensive. In the future, I’d create a reserve of at least 5% in the initial budget to deal with problems like this. I might also ask the architect to go over our estimates together, to see if they catch anything we’ve forgotten.

Bake in changes. As the project unfolds, you’ll likely want to add in things you hadn’t considered during planning. Among other things, we decided to include an interior window in our bathroom, and we tiled the back of our kitchen island. Neither the contractor’s fees nor the finishes were in our original budget. At least 10% is a good estimate for change fees and can be its own line item in your initial budget. (Disclaimer: This is standard advice that we ignored, and then regretted ignoring).

Account for delays. If you’re paying to rent somewhere else and you’re paying mortgage for the place under construction, time equals money. Budget for a couple of months of permitting and planning and at least a 30% delay in construction time. So if your construction is supposed to run three months, assume it’ll go four or more—and account for that extra rent at the outset.

Recognize the hidden costs of custom finishes. Pinterest abounds with pictures of creative kitchens and unique bathrooms. But beware: not only are custom finishes more expensive than stock, they also tend to have long lead times. Ten weeks or more is common for things like custom fronts for Ikea cabinets and for special tile. That means that if they’re delayed in delivery or if there’s a problem with installation, which is more likely if the materials are unusual, your project will run late and thus become more expensive, with little way to adjust.

We chose beautiful custom tiles for our bathroom, one of our splurges. We ordered early enough that they’d arrive in time to be installed right at the end of our planned three-month construction run. But a combination of errors led to a two-month delay after the original end date for our whole project. Each delay in the tile replacements gave our contractor room to slow down on other details, which made it hard to argue that either the tile company or the contractor should pay the extra two months of rent we incurred.

Those two months doubled the cost of the already-expensive tile (and involved a lot of stress with the tile company and contractor). In retrospect, we could have hedged this risk by ordering custom finishes only for things that could be installed after move in if needed, like kitchen cabinet fronts and backsplash tile.

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