How to Keep Your Home Renovation Under Budget

How to Keep Your Home Renovation Under Budget

While it’s easy for home renovations to cost more than you were anticipating, experts say it is possible to stay within your original budget.

Renovating your home can be exciting, since there are so many ways to make your vision come to life and so many contractors and designers to work with. Unfortunately, renovating can also be incredibly stressful—and one of the most challenging aspects is staying within your budget. Whether it’s an unexpected electrical cost, costs that rise because the job needs to be finished quickly, or an expensive lighting fixture you just can’t live without, your budget can be exhausted fast. So, how can you avoid these common renovation mistakes? We polled contractors and designers for tips and tricks to contain the costs from start to finish.
   

Begin Your Project with a Realistic Budget

People often come up with an arbitrary budget number they believe makes sense for their project, says Chip Wade, a host and designer for HGTV and DIY Network and owner of WadeWorks Creative. That number, however, is usually inaccurate.

“Where a lot of us go wrong is, even if we have a general scope of the project, we want what we want,” Wade says. “And we want our budget to buy what we want, but that’s just not reality.”

Uzi Ovadia, president and owner of Oz General Contracting in Bellmore, agrees. “People sometimes think they’re smarter than the contractor, and that’s not necessarily the case,” he says. He has seen renovators buy materials themselves and then bring in a cheap contractor to finish the job, which never seems to cut costs.

On the other hand, many homeowners sign on with contractors too early, before they’ve brought in a designer or made a finite plan. “You actually have no idea of the scope that captures the overall essence of your design,” Wade says. “And that’s because you’re not designing first. You’re just doing a rough scope pricing, which is very dangerous.”

And oftentimes, people wind up busting their budgets because they can’t stick to a plan, says Ann Marie Little, who runs Little John Remodeling Inc. in Northport. “They get their numbers, and then they change the plan as they go or add things on the fly, and they don’t think things through. Sometimes it’s because they’re not waiting for the right person. They’ll take whomever is available and make their decisions hastily.”
    

Work with a Renovating Pro

One of the most important steps for a renovator is to create a full design plan before they call a contractor, and before assigning their project a budget. The best way to do this is to bring in a designer who can map out all of the materials, fixtures, and the scope of work to scale so there’s no ambiguity.

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WadeWorks Creative pairs renovators with designers to create a “full-scale, comprehensive design and construction set” that can be brought to multiple contractors to ensure they are comparing apples to apples when giving quotes. Wade says this is key.

Renovators should also pick out all of their materials and know exactly what they are willing to pay for different aspects of their project. “The general homeowner has no idea if two-thousand dollars is going to buy the lighting fixtures that they want,” Wade says. “So go ahead and select, and have an exact number.”

Some contractors, such as Oz General Contracting, source materials in-house and never use subcontractors, which allows them to provide a more accurate cost estimate. At Oz, after several design sessions, clients “will find out exactly to the penny where [their project] will be,” Ovadia says.
    

Make a Plan, and Stick to It

Wade stresses that renovators should give their contractors incentives to finish the job on time. He recommends putting down only 35-40 percent of the budget for the project at first, then adding another 30 percent when the plumbing, electric, and framing are in and the project is ready for drywall. Don’t pay that last 30 percent until final walkthrough, he says, because leaving the company with only 10 percent of the money left to make before they’re finished means they might get caught up in other jobs.

"Any contractor that wants fifty to sixty percent down, that puts you at a disadvantaged position,” Wade says. “Whoever controls the money, controls the job.”
   

Do Your Project Homework

It is essential that renovators do their homework, do their homework, do their homework, Ovadia stresses.

One way to do this, according to Little, is to make a list of every last thing you want from your renovation—before hiring a contractor, designer, or making any product selections. She recommends using home product sites, such as Kohler.com or Moen.com, to price out the fixtures you’d like rather than going by a third-party seller’s estimates. Then take your list to a professional who knows each and every product you’ll need for your renovation. Most importantly, she says, as you move through the process, cross things off that you can’t afford—and do not deviate from the list.

“If the plan is to redo the bathroom and take out a window, that’s the plan,” Little says. “Stick to the plan!”