Budgeting for your renovation
To set a budget for your renovation is not easy. In general, it is hard to get transparent quotes and figures while doing research. But the truth of the matter is that it’s very hard to give comparative quotes. Like most things in life, renovations can’t be compared apple to apple. It is like buying a shirt – you can buy a pair online for $20 or you can go to a designer shop and pay $200 for one. The difference between them is, of course, the material used, the effort put into the overall design and the brand that you are getting.
Doing a renovation is the same, you can buy a faucet for $120 or you can get one for $1,200 or pick a $3psqft tile or a $280psft marble. While we try to be as transparent about the renovation budgets in the portfolio – it is sometimes hard to see where the money goes to.
That is why I never really ask a budget upfront – it is far more important to understand what design and quality the owners are after. I normally come up with what I call “The Christmas Wishlist” – which includes all the proposed scope of works with realistic material costs. My contractor will then give a quote based on this scope of works.
Sure, often the proposed scope of work will exceed the owners initial budget. But to be frank – most owners have not a realistic idea of what renovations really costs. Especially if you start looking for overseas inspirations. Homes that make it to the pages of magazines or are Instagram worthy do have often a hefty price tag. On top of that, a budget set by the owners might not be realistic with the design or the scope of works they envision. Taking the homeowners through the process of getting a full quote for the proposed works, helps them to take priorities on what is needed and adjust their wish list for the renovation.
That is why in my opinion, it is good to get a reality check and see if the proposed scope of works is something that you can work with. I always find it much better to work downwards compared to upwards. Renovations are already stressful events – and getting slapped with extras at the end of the road might just add more stress. It is best to compromise before you start the renovation, instead of getting slabbed with very high variation orders and rising renovation costs.
The other thing to consider is that, when planning for the renovation, everything is still a line item and a rational choice. But once you start putting in motion the plans, it then becomes an emotional process. It will be very easy to add things to the renovation or to buy a slightly more expensive tap or sofa. A proper ID will guide you along the way and keep you on budget.
You should always budget for some contingency budget – often it is recommended to have about 10% just in case it is needed. If you are renovating a BTO, often you don’t have to tap into that budget (if you don’t add many things to your scope of works and stick to the material budgets). But if you are renovating an old home, you sometimes never know what you are running into.
Just recently I finished a project in Toa Payoh, which was followed by a camera crew to be featured on TV. While the owners had a budget of $50,000 in mind – I already indicated that with their expectations and design choice the budget needed to be $70,000 before work started. Eventually, the actual cost came in at $68,000 – slightly under budget. But still $18,000 more than what they thought when starting the process. I feel its best to know upfront how much the renovation is going to cost and if that is above what you can afford – you then have choices before committing.
There are simple formulae to calculate how much a renovation will cost. It will depend if you are planning for a resale unit that needs a lot of work (like redoing all the electric works and flooring) or a BTO, where most of the works are aesthetic. Your choice of design will also affect the overall construction costs, as well as the quality of the overall finish.
That is why some projects might have a high renovation budget, but the works involved, or the materials used might be more premium. It is never as simple as comparing apples and apples. That is why its best to do your homework and get detailed quotes up front.