Why renovations go over budget and how to keep yours from blowing!

Budgeting for a renovation can be challenging, and just 36% of renovating homeowners hit their budgets in 2019, according to the 2020 Houzz & Home survey. But there are things homeowners can do to improve their chances of sticking to a budget.

Read on to find out how often Renovation projects go over or come in under budget. And get pro tips on what to do to keep Renovation spending on track.

Common budget issues

In 2019, 31% of homeowners who renovated their homes ended their projects over budget, according to the 2020 Houzz & Home study. Some 36% completed Renovation projects right on budget. Just 3% came in with their projects under budget. And 29% had no initial budget for their projects at all.

Homeowners who exceeded their budgets did so for a variety of reasons. One of the top reason’s homeowners cited was finding that products and services cost more than they had expected. (Note: It’s wise to take the low budgets — and short timelines — presented in home Renovation shows with a big grain of salt.)

Another common reason that homeowners went over budget was that the project turned out to be more complex than expected. An example of this might be when your builder opens a wall and finds that all the electrical wiring has to be replaced, which would add to the total project cost if you hadn’t been anticipating that.

A third reason came down to homeowner choice: deciding to buy more expensive products or materials than originally intended. Sometimes people decide that a beautiful kitchen splashback tile or gorgeous range hood is worth the extra expense to get the look they want.

Professional tips for staying on budget

Homeowners can take steps to help keep their projects as close to budget as possible. Here are three strategies suggested by experienced pros:

Plan a buffer in the budget. With renovations, you can plan for the unexpected. Your budget should reflect that. Buffer in an additional 25% of your costs on a Renovate, if not more.  

Focus on your priorities. When it comes to renovations, the possibilities for improving your home can feel almost unlimited — other than by cost. Most people have budgetary limits, but even if you don’t, it’s important to think about your goals for the Renovate.

Even if you have an unlimited budget, there’s so much that you can do that you need to prioritise, at the end of the project, you want to feel satisfied that you put your money where it counted most.

While priorities will vary from person to person, for anyone interested in a whole-house Renovation should put money into common spaces such as the living area and kitchen, as well as the master bedroom and master bathroom.

Trust the professionals. Unless you have deep construction expertise and knowledge of products yourself, it’s a good idea to lean on your builder to most effectively achieve cost savings. 

Bottom line: When looking for cost savings, it’s a good idea to trust the professional you’ve hired to manage your project. And experienced builder will know the best brands to work with, the best savings to get you. That’s one of the advantages of working with a professional.

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This article via Houzz does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.