How to set a realistic Home Renovation Budget.
Many factors come into play when setting a budget for your major home renovation. The fun part, of course, is choosing things like your new floor plan design, mood boarding your desired aesthetic, selecting furnishings, fixtures and fittings, and imagining how much easier family life is going to be once your project is finished. The less fun, but necessary, part is working out how much of your budget needs to be allocated for things like specialist Consultants, planning submission fees, construction materials, and site set-up costs.
We have prepared this quick guide to help you better understand what a home renovation budget might look like, how costs tend to be allocated, and when they need to be paid.
How much should you budget for Specialist Consultants?
Engaging external Specialist Consultants is a necessary part of undergoing a DA or CDC for your home. Which Consultants you will need to engage for your project will depend on factors such as your project scope, your project site, your local council, and whether you already have at hand some of the Documentation required (e.g. the previous owner may have undergone a Site Survey before they sold the house to you). The prices we have provided below are guidelines only, however should be included as part of your overall Project Budget:
Town Planner c.$2,000
Site Survey c.$2,500
Storm Water Engineer/Hydraulic Engineer c.$3,000-$5,000
Structural Engineer c.$3,000-$5,000
Geotechnical Engineer c.$1,000-$1,500
Arborist c.$5,000-$6,000
Quantity Surveyor c.$1,500 (this Service is included in our Fee Proposal)
What about an Architectural Design?
In NSW, Architect fees are charged in one of two ways - as a Fixed Percentage Fee based on the Total Cost Estimate of your build, or as an Hourly Rate Fee. They may also charge disbursements on top of their fee. Most Architects will offer a free consultation to discuss your project, before they supply you with their fee proposal for your consideration.
Once you have approved your Architect’s fee proposal, you will likely need to pay a deposit (usually 10-20%) to confirm commencement of your Design Brief into a Concept Design.
Each Architect will have varying terms, and varying methods with regards to how they invoice you throughout the design stages of your project. With MILEHAM, we require a 20% deposit to commence designs for your project, upon your acceptance of our Fee Proposal. The remaining 80% balance of each Design Stage (we have four stages in total), is invoiced as each Stage is completed, or within 3 months of starting that Stage (whichever comes first).
How much are Planning Submission fees?
Again, fees will vary from council to council, and from Certifier to Certifier, however in NSW you should budget up to $4,000 to pay for submission of your plans to your local Council (for DA) or Private Certifier (for CDC) for their review and approval.
How are Construction Costs paid?
Your builder will use your Architect’s Construction Drawings to provide a detailed construction quote, which forms part of the building contract that both you and your builder agree on prior to starting your build. Construction costs are usually paid one of two ways - in Stages based on work completed, or progressive Time-based payments.
Staged Payments are calculated as a percentage of the total build cost, with sums payable at the completion of each building stage (generally 15-20% per stage), for example:
Stage 1 - Site Clearing and Foundation
Stage 2 - Framing Up
Stage 3 - Lock Up / Weatherproof
Stage 4 - Rough In / Services
Stage 5 - Fit Off / Completion
Stage 6 - Practical Completion
Time-based Payments are where the builder calculates how much work was done in the month and bills accordingly. Having this type of arrangement doesn’t usually provide much of an incentive for the builder to complete your job quickly, which is why most renovators prefer negotiating staged payments.
Top tips to avoid a budget blowout
It pays to use a qualified Architect who will provide rigorous and highly detailed plans, leading to more accurate construction costs. Your architect’s plans form part of your building contract so they should be accurate, detailed and ironclad. This way there is no confusion, misunderstanding or disagreement between parties.
Ensure your Architect knows how to properly cost your designs into a build: Nearly 40% of architecturally designed homes in Australia never make it to the build phase, because the Architectural Designs have blown the build budget. Before you move forward to the Approvals phase (DA or CDC) with your designs, ensure your Architect provides you with a preliminary build cost estimate. If your Architect is unable to do this at a good level of detail, take your designs to a Builder before you submit for approvals to ensure your designs are on track with your build budget. There is nothing more disappointing than receiving approval for a dream home design which you can’t afford to build.
Have your architect manage your project all the way through from the design phase to construction completion. Your architect will be able to query and negotiate on your behalf, any cost variances or changes throughout the construction process.
Ensure the provisional costs provided in your building quote are realistic. If your building quote allocates costs for basic finishes, fittings, and appliances, however you want designer finishes, fittings and appliances, your budget will quickly spiral out of control.
Ensure you allow for a Contingency in your Project Budget: You should allow approximately 5% of your construction budget for contingencies, in case you change your mind on a material to be used, want a small internal design change (e.g. kitchen cabinetry layout), or in case unforeseeable circumstances arise (e.g. asbestos discovered during the demolition phase).
Finding a professional project partner who can help you navigate the complicated elements involved, relationship between, and proportional breakdown of all the components of your project budget is paramount to ensuring your project runs smoothly, without surprises, and keeps to a realistic budget and timeline to avoid unnecessary disappointment.
Still unsure if your home renovation or new build budget is realistic? At MILEHAM, we are not only proficient in providing beautiful architectural family home design solutions for our clients. We pride ourselves in helping guide our clients through the sometimes complicated Consultant, planning submission and authority requirements for their dream home, to ensure your project’s overall budget is realistic from Day 1.
Book your complimentary consultation with MILEHAM today and receive personalised advice on how to best align your dream home goals with your budget.
