If you’re renovating or building a new home, it’s an exciting time. But it is also considered one of life’s top ten stresses. Setting a budget and adhering to it can be difficult for many. Here are six areas where you can avoid a budget blowout:
1.Overspending
You should consider what items will add value to a home, as many items are not necessarily consider of value by others when it comes to resale. If you are planning to stay in your home after building or renovating this isn’t so much of a concern, but if you are looking to sell early after the project is complete then you should consider the need for a swimming pool, extensive landscaping, stainless steel appliances, imported tiles, wall to wall carpeting, or a new heating and cooling system.
2.Underestimating
When planning your project, focus on what you want the final product to look like. One of the greatest areas of underestimating is the finishing costs. The grade of fixtures, including standing, luxury or custom can all impact on the cost of the home.
3.Land Costs
If you are building a new home, you should allow for stamp duty and settlement costs on top of the purchase price. If you’re buying land with an existing old home you should try and pay as close to land value as possible.
4.Site Costs
When building or renovating, you should allow for site preparation costs such as:
- Retaining walls
- Levelling of a block
- Demolition of an old home
- Removal of trees
- Providing new services such as water, power and gas
5.Planning Applications & Permits
Planning applications and permits all vary in cost. It is important to understand what is required in your building project and the costs associated with it. These can include council fees, driveway designs, engineering and landscape designs which will all depend on your project.
6.Internal & External Fixtures
As mentioned, the finishing costs are one of the greatest areas of underestimating. Your budget will depend on how extravagant you want to be with materials, upgrades and finishes. It is recommended for a medium level finish to allow approximately 15 per cent of your overall building budget. For a higher level finish, allow approximately 25 per cent.
There may also be one-off items which you wish to include in your home. These may include rain water tanks, solar hot water or solar electricity. These can add considerable costs and should be factored into your budget.
Keep in mind that a builder’s ‘standard’ price may not include certain costs, so be sure to specify your needs in the schedule to be sure of your final budget for the project.
If there’s one thing you should know – your project will cost more than you think. Even with the most detailed plans and cost guide, the unexpected can happen. It is recommended you add between 10 and 20 per cent of the project cost to your budget. This buffer helps pay for unexpected costs, such as unforeseen structural issues or ground works. It’s what’s called a ‘contingency’, and every good renovator or owner builder should have one.
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