One reason that a lot of renovations run afoul is budget. More precisely, a blown budget. And sometimes, that budget is blown in epic proportion.
We here at the Celeste Project, like many of you I am sure, love to watch those wonderful renovation shows on networks such as PBS, HGTV, DIY, etc. At this particular time, the S.O. and I are watching one of those shows and the plot involves a budget that is so blown that the husband now has to do all the work himself because, well, they massively blew the budget and they have no more cash (I can talk about why this particular family blew their budget later). The really sad part is that, because they got in over their heads and did not effectively monitor and manage their budget, this family may lose their house if the renovations aren’t finished IN a timely manner because they took out a loan akin TO a construction loan. So if the property hasn’t increased enough in value thanks to the renovation, the bank can foreclose on the property. Having an incomplete reno can actually LOWER the property value by an incredible amount (think of an unfinished roof reno, a bathroom that is mostly demolished, or a living room that has no floor.)
How did things go so haywire? Well, these particular renovation newbies failed to figure out what they wanted before the renovation started and lock down their plans suffered from all the things that cause most renovate budgets to implode: upgrades, scope creep, and not sticking to the original plan – in this particular case not having a plan at all was the original culprit which led to all the other budget killers.
Scope creep happens when the home owners decide that “the renovated kitchen is going to make the powder room look dated so we’ll just renovate that too.” Or when fixing the shower suddenly becomes an entire bathroom renovation. Or, more likely, creep happens when, as you tear into a wall to re-do the drywall, you discover that the electrical wiring is half aluminum and half copper – you HAVE to replace it or risk fire. Or, as you’re removing the sink (that you intend to re-use when you install the new countertop), your S.O. realizes that the old cheap stainless version will look SOOOooo crappy when placed in the new countertop… But, in all truth, the most dangerous part is when the renovator makes these plan changes, yet still insists that he stick with the original renovation budget. That’s usually when you hear: “We’ll make up the difference by doing the drywall (or insert, tiling, plumbing, electrical, whatever) ourselves.”
Clearly, upgrades cause renovations to implode by burning up the budget. However, most professionals will advise renovators to have some “slack” built into the budget to help cover unexpected expenses. It’s called a contingency fund. Generally, one builds a 10 TO 15 percent cusion INTO their budget TO allow FOR overages, missteps AND mismeasurements (LIKE WHEN you accidently cut 3 1/2″ off the new door instead of 2 1/2″ (I nevere really actually ever did this, it’s just an example thing that I never really did. actually. well, maybe.) When you open a wall and find that the plumbing has been leaking for years and the whole wall needs to be rebuilt, there is money in the budget for that. Lots of home owners see that as a way to pay for upgrades that they want. Then when they run into a real contingency all the money is already spent on upgraded tile, and handmade wall paper and other decorative touches.
Other times there’s just a general NOT sticking TO the plan. “Well, we had contractors here so I thought they could do the roof while they’re here. Or “I wanted TO move the furniture around AND so I got these nice men TO help me.” Or, in our case, “um… Mr. Plumber guy, umm… can you ALSO run the gas line up TO the front OF the house because there’s this new heater thing that would be real nice since our house doesn’t have ANY heat, please?” (Cha-Ching! There goes another $300.) Since there is now a lot of hired help in the house, all those things that have been sitting on the honey-do list start getting done. But unlike your honey (or, your Dear Hunny Bunny), these guys charge by the hour. They’re all too happy to help you out by moving that sofa, or hang that picture, or whatever. And you shouldn’t be paying your $70 an hour electrician or plumber to help you hang family photos.
But, now back to our story: once the renovation started, (and even though the husband constantly changed the house plans thoroughout the reno) the wife decided that she, too, needed to demand things. First, she demanded that the stairway be included in the renovation and not just repainted. That means extra money.Then she started demanding upgrades. Where did it go? To some fancier columns to hold up the new fancier support beam. It looks “rustic” but it cost a ton of money to make and install. It went to fancier stair rails and treads. Instead of painted spindles and treads on the stair rail, they have turned stained spindles and fancy stained oak treads and risers. They got nicer light fixtures than the ones that were originally specified. And, although they had decided that they could live in the house DURING the renovation (with their two small children), she decided from time to time that it was too dirty and thus, at least the local Hilton (note, not the local Super 8), made lots of money.
The Life and Times of the Little Blue House 