How to realistically build a renovation budget

If you believe what you see on HGTV, you may be surprised by your renovation’s real price tag.

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When budgeting for a renovation project, Mina Fies, CEO of Synergy Design & Construction, warns that you can’t believe what you see on HGTV. “Be prepared for a little bit of sticker shock,” she says. Consulting Remodeling Magazine’s Cost vs. Value Report is an effective way to manage your expectations and find a realistic budget.

Before you accept a contractor’s bid, remember that you get what you pay for. “If you’re just looking for the lowest price, when a job is over, they may not be around to service anything,” Chris Arnold, vice president of business development for Foster Remodeling Solutions, warns. On the other hand, a company with a showroom and a full staff may come in with a higher bid because of overhead, but you’ll get more support and security.

Both Fies and Arnold continually stress the importance of pinning down all the details before you sign a contract. “Any time we hear that a project didn’t go well or it was over budget, we figure that something was missed in the planning process,” Arnold says.
Fies says to lay the groundwork by browsing products at hardware stores to find out what general price range your tastes fall into. “When contractors build out the cost or an estimate for you, they’re just creating numbers of what they think your allowances should be, so the more information you can provide them, the better off,” she says. If you give them figures for all the big-ticket items—appliances, tiles, flooring, fixtures—you’ll get an estimate that accurately reflects your vision for the project. “Then you know you’re doing an apples-to-apples comparison,” Fies adds.

When it’s time to sign the final documents, Arnold says the best way to protect yourself from change orders is “having all the material picked out with all of the numbers and all the detail written in a fixed-price contract.”

As you evaluate your estimates from contractors, keep in mind the following breakdown of costs, according to Fies. “The ranges are necessary because it fluctuates depending on the project,” she adds.

General Conditions
(15-25%)

Architectural & Interior Design
County Permitting and Fees
General Labor
Demolition
Project Management and Daily Supervision
Dumpsters, Hauling and Waste Removal

Labor
(20-40%)

Carpentry
Tilework
Drywall
Painting
Mechanical, Engineering and Plumbing
Flooring

Material
(20-40%)

Cabinetry
Countertops
Flooring
Tile
Appliances
Plumbing and Lighting Fixtures

(Best Home Experts, March 2018)

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