HOME + GARDEN, HOME decor | January 9, 2009

Why Home Renovation Projects Get Over Budget?

I read a few comments on HGTV’s Style Sheet about the fact that Peter Fallico often busted his budget in Home to Flip. It felt strange that Peter was the target since does Sarah Richardson, that I love watching on TV, is the queen of going over budget.

home to flip living room and entry halll hgtv

As an interior designer raised with parents who enjoy building houses, I will try to explain that it is not due to a lack of professionalism. Many factors come to play and can affect how much money you spend.

Unforeseen Structural Problems

Until you open the floors and the walls, you can never be sure how much it will cost if you are renovating an older house. A typical house inspection when you are buying a house cannot find all the problems.

Unrealistic Budget for what you want

Let’s face it, most of us do not know how pricey building your ideal house can be. Construction prices have increased a lot over the last decade. And quality craftsmanship costs money. Plus there is a shortage of manpower in most urban cities.

A friend who constructed a mansion house was proud to be on budget while he was building it. We told him before that he underestimated the total cost. The construction was still at the frame stage. I smiled since you never bust your budget on the rough of a new construction. The challenges come with the finishes and the interior design.

So if you wish for the $1 million look at a quarter of the price, you need to be really careful on where you splurge. My philosophy is to splurge on things that require lots of time and money to replace and to wait later to upgrade the things that are easy to replace, like the bathroom fixtures.

Being Carried Away

When you go tile shopping, it is easy to say it is just $2 dollar more a square feet. Or why not add a pattern or a border. You need to take into account that the expense does not stop there. When you mix two ceramics, it adds complexity to the installation. I once added three square border shape on my bathroom floor; it seems simple. It took the guy almost a day to align things perfectly with the change of dimensions.

Plus they are plenty of occasions to add a few hundreds of dollars in a big renovation job; so extras add up fast.

Lack of Planning

From what I heard from architects and based on my experience, the best way to not bust your budget is to carefully plan everything in advance. This way, you eliminate costly building mistakes (ex: changing twice the position of a wall) and you reduce the chance to be carried away.

Better planning makes sure that you get what you really want and that the ensemble is cohesive. My best advice is to examine and evaluate many times the entire plan and all the finishes before you start building. You may need to do some demolition to grasp the full potential first. But it is a small price to pay to get the house of your dreams on budget.

+ Photo credits: Home to Flip on Style Sheet

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3 Responses to “Why Home Renovation Projects Get Over Budget?”

  1. Pingback from a Web site

    [...] Too many people rush to the construction part before resolving all the design issues. This is the main reason why renovations cost way more than the initial [...]

  2. You are absolutely right Kim – One of the main reasons why home renovation get over the initial budget is the lack of planning. Another reason could be that homeowners try to do too much (getting carried away) without knowing what improvements increase home value or adds true charm to their home.

    It is always recommended that homeowners add an additional 10% to the initial estimate so that it can cover any unforeseen structural problems that may come to light during renovation. I also recommend reading the following article which informs home owners how to increase their home value through smart renovations and value engineering. http://www.homeremodelingguide.ca/?p=195

  3. Hi. Agree with al of your points but the one thing no one considers or realizes is “The MISCELLANEOUS Expenses”.

    When we renovated our B & B Inn I would have been close to on budget if not for the miscellaneous expense list which was an extra $10,000.00 the first year.

    As a professional in the industry I know what I’m doing and made a point of allocating each rooms expenses to a separate page, listing everything from baseboards, paint, fabric, lighting and plumbing. I was pretty close on each room.

    However you can’t really plan for screws, paint brushes, drop sheets, extra paper towels, TSP, extra wire for moving electronics etc etc etc etc. I couldn’t imagine it then and it’s still hard to believe.

    So, yes, add at least 10% and then add $10,000.00 to that! (Note that this was for the whole house but there were no unexpected problems, no plumbing issues or large overages and very little actual construction)

    Barbara van Pelt
    Vinifera, The Inn in Winery Row – http://www.viniferainn.ca
    Grimsby, Ontario, Canada