In this particular post, we are going to look at money traps. Extra costs are inevitable in any building project, so please don’t beat yourself up if things don’t go exactly to plan, even the well-seasoned professionals run into hiccups, it’s just part of the process. Rather than aim for perfection and run to the limit of your funds, the best way to minimise the impact of unexpected costs is to make them expected. When you leave some padding in your budget for mistakes and changes, you take the stress off the situation and give yourself more ability to respond to those unforeseen challenges.
The way to do this is to set some money aside, a rainy-day pocket. How much you set aside will depend a little on the size of your project and your budget, but basically it stands to reason that the bigger your renovation project, the more trouble you might uncover.
Here are some just-in-case-costs you might want to consider when doing your calculations:
Before you do anything, even get a quote, contact your insurance company and see what the terms are for renovations. See about any coverage they might offer for any of the following traps. Also ask about what your new insurance rates will be when the work is completed (there might not be a change). Always check that any workers coming to your property have professional indemnity insurance so if they get into trouble on the job, it’s not your responsibility to pay for it. It’s worth knowing what your coverage is for workers on site as well, for peace of mind.
As well as the materials or fees needed to fix the actual problem, also factor in the labour costs if you have to bring in extra help, get an expert or keep your project team on for a longer period.
Delays and site costs
If you have a very large renovation you can expect some site costs. In some cases, you won’t be able to get a good estimation of these costs from the builder until after the contour and soil tests have been completed. Examples might be tree removal including tree roots, installing retaining walls, excavation, soil grade restrictions and any slopes that need working around. Keep in mind that you may have to pay for the hire of any specialty equipment even if there are delays due to weather or material delivery. Check the fine print and ask your project manager up front about what you can expect. You probably won’t be able to change the terms, but at least you can prepare for the worst in your budget.
Asbestos is a costly problem and it can sneak up on you. It might only be when a wall comes down that it’s true make-up is revealed. All asbestos removal is taken seriously, even if it’s just a little garden shed. Not only is removal expensive, it also might take a while to get a professional team booked, the red tape cleared and work to continue.
It looks simple, doesn't it? But plastering can be expensive. In New South Wales plasterers charge $48 an hour. South Australia and Western Australia plasterers go up to around $50 per hour. Best bet is to calculate a mark around $20 per square metre.
A home’s interior might seem perfectly healthy until you open it up, then you find damage from damp or termites that not only needs to be treated, but will also hold up renovation work until it’s up to scratch. If your home is older you might want to consider paying for a termite and building structure check before you get started.
Buying a fixed-price plan is often a more cost-effective route than having a custom design. The downside here is that it might not fit your space or your needs very well. Sometimes changes have to happen because the original plan turns out not to be viable in the real world, sometimes you will request changes to make the overall space more liveable. Whichever the case it will run up costs. Even the smallest of changes are going to need plans and calculations to ensure they are safe and compliant.
It’s good to have a backup accommodation plan in place even if your intention is to remain on the property during work. If you are forced out, where can you go and what is a feasible price to pay for a roof over your head. Having options on paper can really help in the case of an emergency (like the roof falling in). Can you stay with a friend or relative, is it possible to put a caravan on the back lawn for a while or do you need a short-term rental?
In our final post in the renovation series we will look at what outside funds you can tap into to help boost your application over the line! Watch out for that one next week.
Developers are known for spending big money on property because they know what they want and how much value they can get from the right location.
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