Setting up a renovation budget is a crucial step in any home improvement project. It ensures that you have a clear understanding of your financial resources and helps you make informed decisions throughout the renovation process. Here are some key considerations to keep in mind when establishing a renovation budget.

1. Material & labor costs

Once you have defined the scope of works and have an idea of what your project entails, start contacting contractors to request quotations. At this point they should be able to give you a ballpark figure for labor and materials based on the scale of the project.

2. Design fees

If you are considering hiring a design team - architect, interior designer, lighting designer - include in your budget all the fees associated with their services. If you are not sure how to approach an interior designer, check out my previous article 5 things to consider before hiring an interior designer

3. Permits & legal fees

Check with local authorities about any necessary permits or licenses required for the renovation project. Include the costs of obtaining these permits and any associated legal fees. Your design team should be able to guide you through the process, advise on associated costs and help you put together the documentation needed

4. Contingency fund

Set aside a contingency fund for unexpected expenses or unforeseen issues that may arise during the renovation process. It's generally recommended to allocate around 10-15% of the total budget as a contingency fund.

5. insurance

Review your insurance policies to ensure adequate coverage during the renovation period. Depending on the scope of the project, you may need to adjust or obtain additional coverage. Very important, request proof of insurance from all parties involved in the renovation (contractors, electrician, plumbers, designers, structural engineers)  this will give you peace of mind throughout the works.

6. living situation

Think about how the renovation will affect your living arrangements. Depending on the scope of the project, you may need to temporarily relocate or make arrangements to live comfortably amidst the construction. Include the costs of relocating in your budget. These could be : renting a property to live in during the renovation, storing existing furniture in a storage facility,  transport and don’t forget to allow for extra utility bills that will come from the works at the property.

7. Timeline

When creating the timeline for the works, it is important to understand how you can save and make smart investment decisions. For example, if you are having a contractor on site try to have most of the works done during that time. You have already covered the cost to set up the team, if you leave something to do later, the contractor will have to charge again for the preliminary work. 

Ask your design team to share the timeline, this will ensure you are informed about key dates and keep track of payment dates in order to manage the project cashflow. 

A well-planned renovation budget sets the foundation for a successful home improvement project. By carefully considering your goals, financial situation, and project specifics, you can create a realistic budget that ensures a smooth and satisfactory renovation experience. Remember to account for unexpected costs, prioritise your expenses, and maintain flexibility to adapt to any changes that may arise. Maintain open communication with your design team and ensure they understand your priorities and concerns throughout the process. 


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