Remodeling projects are exciting. It's easy to get caught up in the excitement picking out all sorts of features and finishes from built-ins to cabinets, flooring and more. It's also easy to exceed your remodeling budget if you don't keep track of all planned and actual purchases. You need to do this so you can make adjustments when you spend more than your allowance on one feature. That's when you need to subtract enough from the remaining items to stay on budget.
Your design-build team should provide you with a list of finishes you have to select, and ideally they'll give you a recommended range of prices so you can manage your budget. Yes, with finishes often times exceeding 50% of the costs for a remodeling project, you're in control through the choices you make.
Do your math before you start picking finishes, i.e. put your list in a spreadsheet. Look at the spread from low-end, builder finishes to high end products which can cost 10 times as much or more.
You Control Remodeling Costs – (Whether You Know It or Not)!
… Contributed by Jackie Braitman, Braitman Design/Build
Let’s look at the 4 projects where discretionary costs were substantially greater than or were less than 50% of overall project costs. Discretionary expenses refer to the choice of finish, i.e. you can create a very functional kitchen with a nice $1,200 gas stove or you can pick a professional Viking stove that costs more than $4,500.
These projects (project #) are part of the bar graph (below) introduced in the first article, where the grey bars represent the percentage of the total remodeling price that went to general construction labor and materials. The yellow bars represent the cost of finishes and details, or discretionary expenses based on the homeowner's choices.
First Floor Remodel (Project #1)
In the first floor remodel, 65% of the costs were discretionary finish decisions. The primary driver of price here was custom built-ins and high-end finishes. Another driver was the homeowner was so excited about the changes that he increased the scope of the project to include more of the residence. We still came in on-budget because we planned for the level of detail and we included 15% contingency based on our sense that the homeowner was vacillating about project scope.
Basement Remodel (Project #8)
With this basement remodel, 64% of the costs were discretionary: The drivers here were the choice of many high-end materials and finishes. We came in 5% under-budget because we specified all the finishes before the job began.
A Whole House Remodel (Project #4)
This whole whole house remodel was managed more tightly so only 47% of the costs were discretionary: Frankly, this was a property that I was flipping. I added drama through lower priced touches such as color palette. I deliberately chose finishes that were attractive but low priced. The project came in 10% under budget because we found fewer problems than expected during the remodel so less of the contingency was used.
Master Suite Remodel (Project #7)
With this master suite remodel, only Only 46% of the costs were discretionary: We used stock finishes in unusual ways and we used a limited palette of finishes which allowed us steeper volume savings. The project came in 2% under-budget.
Tips for Controlling Remodeling Costs
There are 3 keys tools to help you control your remodeling costs. By working with a design-build team, you should be able to complete your remodeling project on budget, when you:
- Complete a fully-fleshed out design.
- Develop an extraordinarily detailed budget, and use it to guide your purchases.
- Include the appropriate contingency for structural unknowns and last minute changes to finishes.
The spreadsheet I use with clients literally lists every finish item that will be purchased including every single plumbing fixture, each cabinet pull, and the detailed specs for windows, doors and cabinets. This not only forces me and my client to think through the options but will also bring up items that neither of us has thought about. If we’re thoughtful about this process, we will come in on budget.