How to plan for a successful renovation

Are you considering a home remodel or renovation project? What is your biggest fear? If you said going over budget you're not alone - this is a huge fear for many, and for good reason. It happens. A lot. What is really surprising isn't that it happens, but that so much of it is totally preventable. 

WHY BUDGETS FAIL

Any time you are remodeling an older home you are bound to find surprises - poor renovation work by previous owners, previously undiscovered leaks, wiring that no longer meets code, mold - the list goes on forever. This is normal. Not everything is found in an inspection and some things you just don't know until you open up the walls. You can make an educated guess, but we don't all have X-Ray vision. Yet

Do you know about HOUZZ? It is an amazing resource for homeowners and professionals alike. It offers so much information as well as inspiration and is interesting to boot. Before reading their article  why kitchen renovations go over budget, I would have said these unexpected construction issues were the #1 reason for blowing a budget.

Nope. Turns out that is simply the #1 preventable reason. The actual #1 answer, and in fact all 4 top answers, are about a lack of planning. Here is the list:

  1. Decided to buy more expensive products or materials.
  2. Products or services were more costly than expected. 
  3. Decided to change project scope or design.
  4. Project was more complex than expected. 

1 and 3 show that the homeowner changed their mind about something. 2 and 4 show that they had unrealistic expectations relating to their project. All of these answers are really about ONE thing : poor planning.

Poor planning is the #1 (100% preventable) reason home remodel projects go over budget.

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HOW TO PLAN FOR SUCCESS, STEP BY STEP

1. Research what you want. Read magazines, stalk your favorite designers on instagram, go crazy pinning all your favorites. Make a mood board

2. Set your scope. Hire a designer if you have trouble with this stage. For a larger remodel, it will be well worth it. 

3. Make a line item list of everything that needs to be done. Everything. If you do not do this here is what will happen: contractors will bid on the plan you present, even if they know it is missing a few items. Why? Because they know you are getting bids from multiple people and will likely pick the cheapest.

They also know that when the change order comes in later you will have no choice but to pay what they ask, which will undoubtedly be steeper than if it had been accounted for at the beginning. 

One way to get around this is to make every contractor line itemize their bids. After you get the bids you will see every contractor has a different set of line items. Go through all the bids, compile your own line item list, and ask every contractor to re-submit. 

 THE DOMINO EFFECT

Some items may be hard to see without experience. For example, if you are updating an older bathroom you may want new counter tops. You probably also want new base cabinets. This will require new sink basins and new faucets. OK, you probably got all that. But did you think of the windows? Does the sill material match the old counter top? Will your old aluminum frame windows look terrible in your new bathroom? And what about the plumbing? Will the lines have to be adjusted to accommodate the different size of the new cabinets? What about new flooring? Is your sub-floor sound? Will you have to move the light fixtures to align with the new sink locations? It's like dominoes, one small change makes a big ripple. 

This is more work for everyone involved (including you, the home owner) but if you want to compare oranges to other oranges, you should do it. If you don't want to pay twice the market rate for oranges, you should also do it. Using milestones may help you think about your project in an organized way. 

4. Make a line item list of all your finishes and appliances. Don't simply put an "allowance" or "not to exceed" in the budget. Go look at the products. What can you get for $50? Do you like it? What can you get for $100 more? Do you like it 150x more?

Decide what  you want before you sign the contract. Not only will you be happier with the result, you won't sabotage your timing if you have to special order a part or search for the right counter top slab. 

5. Have realistic expectations. Remember the "hidden" costs - taxes, permitting fees, shipping, installation, small items that add up like new vent covers and outlet covers, etc. Adding a 20% contingency for unforeseen changes (burst pipe anyone?) is always wise. 

6. Don't rush. Your preferred contractor is only available tomorrow but you haven't worked out all the details yet? Don't rush. You and your partner can't agree on cabinets or open shelving? Don't rush. You want to get started but aren't ready to pick all the finishes yet? Don't rush. 

Spend as long as you need doing the planning for one simple reason . Change order = more money for them. Hence, less money for you. 

If you can get through a remodel without changing your mind, you win.

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BONUS TIP:

Amazingly, some people (not you) go into a renovation without a budget. Their plan is simply to keep costs as low as possible. I am going to tell you a secret. To stay within your budget you need to actually have a budget. 

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