Help My Home Renovation is Over Budget! Now What?
How many times has this situation occurred, probably on almost every construction project in existence? This occurs in the residential marketplace as well as the commercial construction industry. The budget is always the limiting factor in the pursuit of constructing the best project for the client. Cost is a factor that is always of concern, and it appears, always being exceeded.
Although I have identified some suggestions, regarding cost overruns, and how to minimize the cost of the project, I will once again provide some very basic insights.
- Do you really need all that space? Carefully evaluate the project in terms of size. Is there a real need for the actual square footage that you are constructing? I have found that many clients will acknowledge the fact that they could have easily adapted to a construction project that was much smaller. Realistically evaluate your square footage requirements. Do not allow social assumptions and competition to dictate your construction project. Space is money, make it smaller! Every square foot that is added, is adding money to the budget.
- Carefully consider what rooms are really necessary? Although the normal, conventional home has both a living room and a dining room and in many cases a great room or family room, carefully evaluate the need for all of these rooms. Why can’t the living room be replaced with the great room, and do you really entertain in a formal dining room? Ensure that each room, with its square footage, is required and will be utilized. Square footage is cost!
- Why the special finishes? Evaluate all of the finishes within your construction project. In almost all cases, the finishes can be incorporated at a later date. If there is granite in the foyer, this granite is worth a considerable amount of money, eliminate the granite. Install a vinyl floor for the initial finish and, if finances improve, install the granite at a later date. All finishes should be treated in this manner, if reduction in budget is required. Whatever you can install that is easily replaced with the more expensive and dreamed about finish in the future should be considered. Vinyl flooring is an excellent substitute for much more expensive flooring selections and can be easily removed and replaced in the future.
- Really!! You want that in the kitchen? The kitchen is always a very important detail of the residential home that most individuals will hesitate to economize. However, look at the kitchen and the requirements of realistically cooking in the kitchen. As I have indicated in other webpages, go to IKEA and look at their kitchens. If the budget needs to be reduced, do not allow the socially mandated and preferred kitchen vendor, to position themselves in your head. Kitchens are ridiculously priced, make them simple and you will save some substantial money. There is money to be saved in the kitchen, if you keep your options open and use some creativity to make the kitchen a special place.
- Light fixtures and plumbing fixtures. Reduce the so called “quality” of both the light fixtures and the plumbing fixtures. Do not allow the seduction of all the homeowner magazines and publications that are simply intended to sell products. Go to the big box stores, buy what is currently on sale, and use these light fixtures and plumbing fixtures until the money is burning a hole in your pocket and you must spend it! Do not be convinced that all of the advertisement and publications require you to spend your money. Look for sales, discontinued items, etc. In many cases, the trendy fixtures, both electrical and plumbing, are the most expensive and the worst quality. Stay with the basics and you will save money and never have to replace them. You as the homeowner buy the fixtures directly and not the contractor. Why have a markup on this type of purchase, it is substantial, and you need no expertise to purchase your own fixtures.
- Carpet the world. If you need to save money, carpet the entire home. You can always install exactly what you want, when the pocketbook is more substantial. Carpet will satisfy your creature comforts and will cover over the plywood subfloor. The carpet can always be replaced with other flooring materials when the financial picture is brighter.
- Live on the plywood subfloor. My wife will laugh at this one. During a very stressful move, my family lived for many months on the plywood subfloor of our new home. We would sweep up the plywood, place a few area rugs around, and make sure we all wore our shoes in the house to eliminate the possibility of slivers. We all became quite attached to the different wood textures and colors in the subfloor .
- Use friends and family. Literally, use your friends and your family to perform some of the work. Look around for favors, or the ability to trade your services for the services of others. If you happen to be an accountant, look to trade this service with another contractor, such as a painter, a carpenter, etc. Be creative, and you will save substantial money. In addition, use your family, maybe a father in law, a father, etc. In most cases, the simple request for help will get you more than you need. Do not be hesitant or shy; ask for help, you will be very surprised at the reaction of friends and family members. I remember a very good friend of mine helping my stain the cedar planking that eventually was installed on the ceiling of our family room. Bob had left a few footprints on the planks that I did not notice, until they were installed on the ceiling. Those footprints provided many humorous jokes and discussions during the wonderful years of living in that home! Remember, creativity is good, and will offer many fond memories as the years roll on by.
- Move in prematurely. Although the majority of contractors will inform you that you cannot move in to early, do it! This will eliminate some of the cost that is incurred to finish all of the final painting, trim work, etc. It is much better to move into a partially completed residence, than to not move in at all, due to cost. Be aware of the tendency of contractors to inform you that you are not allowed into the home until, it is 100% completed. This is basically a tactic to force you to pay for the final completion and ensure that the contractor squeezes as much money from you as possible. Believe me, the contractor will never look back at you and feel sorry, when the collection agencies are at the door!
- So what if its mud? The exterior of the home, or project does not matter in reference to the ability to move in and use the space. Who really cares if the landscaping is complete and the grass is green. Mud works, move in, and eliminate the cost of landscaping. The idea is to move in! Planting grass and trees can always be done, whenever the money is available.
- Gravel is fine! There is no reason to asphalt the driveway. Gravel will be fine, and for the initial timing on the project, the traveling over mud and dirt is OK. It is much better than not moving in at all. In addition, the use of the gravel or a well compacted driveway of dirt will enhance the performance of the finished asphalt due to the compaction that resulted from the use of this driveway. In addition, you will quickly witness the normal travel and parking routines of the family. Now simply pave, where everyone has been driving on. I suggest the same procedure be used with paths and landscape patios. Witness where everyone walks and gathers when there is nothing obligating them to congregate in a certain spot or take a path from one point to the other. Use the yard, then install the pathways, the patios and the landscaping around the well-worn pathways and areas of congregation.
- Threaten to fire everyone! Although this is uncomfortable for the average homeowner or individual that is in the middle of a project, it is a formidable means of saving money. If you are in the middle of a construction project and note that the budget is running wild, and money is tightening up, stop the work. Threaten to fire the entire team of contractors and stop the money. Yes, this will normally work. Do not hesitate! Once the contractors realize that you are serious, their additional work, their money concerns will evaporate. There is nothing more stimulating to the average contractor than the possibility of project default. Most reasonable contractors will do anything to eliminate the default on a project. Defaulting normally means they get NO money, and this is much worse than renegotiating the final costs.
- Have your plumber cap all plumbing lines, and use one bathroom. If you have multiple bathrooms in the home, and money tightens up, stop the work in the bathrooms. You can use one and complete the others as money becomes available. Indicate to your plumber that you are at the end of the money trail. Instruct them to cap everything, other than one functional bathroom. This will save you all the fixtures, installation, faucets, etc.
- Have the electrician only install the required lighting in the home. Do not install any of the exterior lights or landscape fixtures. Have the electrician safe off all of the electrical in junction boxes for connection to fixtures at a later date, when money becomes available.
- Stop all painting. The painting, staining and finish surfaces do not have to be 100% completed to move in. Either you can finish these applications, or you can wait for money to become available. Watch any DIY show and they will inform you of how simple this application is for the homeowner. Remember, I am only quoting what they all say!
In summary, if you are out of money or quickly running out of money, stop the bleeding. It may require an intense obligation on your part as the owner, but you can do it! Do NOT allow the contractor to create an uncomfortable environment when you suggest the need for cost savings. This is your money, not theirs and they will normally say anything to make sure the money continues to flow!
As I have repeatedly indicated, the use of a professional construction consultant or lawyer will enable you to save much more, than their costs. Please consider hiring an expert to represent you the homeowner!