Here are the top ten reasons why home remodel projects are over budget and what you can do to avoid going over budget.
Not being prepared
It is okay, we can admit it. We get so excited about our projects that we forget to get prepared to manage our project. We rely on others to manage the project and we do not start the process of managing our selections for the project until it’s too late.
Getting in front of the details of your project like what items and finishes you want in this project will assist in managing budgets. When you are prepared and have options to change your decisions, you are also more equipped to managing expectations. Managing your expectations are as important as managing your project budgets.
Under estimating budget
Getting prepared can help us properly estimate our project budget. Without properly understanding our project details, we risk under estimating our budgets.
It is important to admit that we may not have skills in construction or project management. Awareness helps us look to others for assistance. This could be our contractors, online or family and friends who have recently completed a project. This support will assist us in properly estimating our initial budget.
Not projecting unforeseen situations
Because we did not build our homes and contractors performed the work, we need to be prepared for the unexpected. The unexpected construction costs can easily push projects significantly over budget. These unforeseen situations can also push our timeline out and thus, our projects will take longer to complete.
Once a budget has been established, adding approximately 10% of the budget to an unforeseen situation could alleviate some pressure if construction does cause problems.
Champagne taste yet beer budget
Many of us have experienced this concept. We are on Pinterest or Houzz looking at all the options for these amazing kitchens. We just need to have this exact project. But we we forget that these projects may have been for a home that is much more expensive than ours.
So we get excited about project details that are way out of budget or may not be worth it for the neighborhoods we are in. We mean that some project details may not recoup value if neighbors have not made updates.
Constantly making changes
When you go into a project and you make changes frequently, you are risking serious overages to your budget. Many people have a hard time envisioning what a project looks like before it is complete. This then results in moving ahead with construction, then replacing a portions of the project and adding more construction.
This increases labor costs and then you may be stuck with excess product or have to pay restocking fees. It is very easy to make changes and easy to say “I do not like this, let’s make a change”. An option would be to get prepared possibly with a designer who can provide guidance. Another option is to live with your newly designed project and then make adjustments 5- 10 years in the future.
Thinking only of your favorite aspects of the project
Many homeowners get excited about the big, beautifully and outward looking pieces of a home remodel project. So for a kitchen, people think of cabinets, floors, appliances and countertops. And they forget about sinks, faucets, and garbage disposals. Forgetting these items can significantly increase budgets and cause pain for the homeowner.
Focusing on all the items and details of a project will help every homeowner properly budget per item and then if adjustments need to be made, they get made along the project process.
Change the project scope
Project scope ties into everything we have touched base on so far. We decide to increase the high end finishes. Families review the use of the space after demolition is complete, and decides that additional scope needs to be added to the project. This can get very expensive and can change the project scope significantly.
It is important to understand the basis of the project and also what the initial goal of the project was. This will keep you focused on the project and the reason for the project.
Poor communication
Clear communication is critical to a successful project. If someone says one thing and someone else hears something else, we could be in the middle of a he said/she said battle. Additionally, one spouse tells a contractor one thing and another spouse tell the contractor another thing and this creates chaos and frustration for everyone involved.
Keep specific notes on the project. Communicate in written form. Make sure you and your spouse are on the same page as it relates to the project. Have regular project meetings with spouses and contractors to avoid confusion.
Rushing a project
Rushing a project generally requires more labor in a shorter period of time. Hiring more staff and asking people to work after hours increases expenses for projects. Rushing a project can also increase the risk of mistakes which can cost more in the long term.
It is important to set the appropriate schedule with all parties to make sure your deadlines are met but you can also meet your budget.
Delaying a project
Rushing a project can be costly and so can delaying a project. When you delay a project, you force your contractor to potentially have to take work elsewhere. This may cause challenges in being able to get your contractor back on your project.
Delaying a project, for instance a kitchen remodel, may force you to eat out more often than you like. Or modifying a laundry room forces to you to take your laundry to a laundromat. This continues to increase time and money when managing your daily needs.
So when managing your projects, remember to focus on all the project details before you get started. Remember that your project goes through a process and lifecycle and it is important to understand that changes may need to be during the process. But limiting these changes can be in our control.
