- Posted 25 Jun
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Planning a home renovation is a complicated and expensive undertaking but the results can be amazing. Whether you are reinvesting money from a home loan refinancing or you are renovating before selling to improve your home’s value, the renovation’s budget should be your top concern.
Creating a realistic budget and sticking to it is the key to keeping both your stress levels and renovation costs under control.
These quick tips below can help you develop a budget and track your renovation expenses.
Consult a team of experts
If you’ve never done a major home renovation project, you probably won’t have accurate estimates for how much your project should cost. So when you are researching tradies and getting estimates, you’ll need to ask a lot of questions about anticipated costs.
Some of these include:
- How long will the project take and how much will the labour be?
- How much will materials cost and are there cheaper materials that can produce a similar outcome?
- Are there any other anticipated costs that I haven’t thought of?
Create a detailed budget, then add a buffer
Once you have a thorough understanding of all the steps that will be involved, make a detailed list of what needs to happen and the estimated costs associated with each phase. Make your breakdown as detailed as possible.
Document elements such as labour costs, disposal and clean up, and materials costs separately. This level of detail lets you know immediately if any part of the renovation is in danger of going over budget.
Once you’ve created your detailed budget, add at least 10 per cent to your projected costs. If you really want to be safe, add 15 per cent.
Every project encounters unexpected costs. Everything from weather delays to unforeseen home issues such as wood rot or insect damage can cause budget increases. With a little padding in your budget, you’ll be prepared.
Tracking project spending
Setting up a spreadsheet is the easiest way to track your ongoing renovation costs. This doesn’t have to be anything fancy, just put your budget amounts in one column and then document the actual costs in the next column. Subtract the two columns and then create a running total at the bottom, and you’ll know at a glance how the renovation is going.
You’ll need to update your tracker regularly.
At least twice per week, enter in any receipts you’ve received. If a line item is complete and won’t be changing again, you may want to highlight it or mark it somehow so you can easily see what items are still open and accruing expenses.
If you’ve done your homework to document all the steps and you are diligent about updating your spreadsheet, your next home renovation should be completely within budget and with minimal hassle.
Are you planning a home renovation or searching for your next home? Let Australian Credit and Finance help with all your mortgage and home loan refinancing needs. Contact our team of experts to speak with someone today.