5 Tips to Budget and Control Costs for Your Home Remodel Project

  • Cost Control Construction

“How do I budget and control costs for a significant remodel project I’m contemplating? I’d like to do a Master Suite Addition, a new Kitchen/Dining area, and re-configuration of the bedrooms.”

There are FIVE major things you can do to keep costs under control for your remodel:

1. Identify all scope items before you begin, not during construction.

2. Break your project down into its significant scope components.

3. Break those components down into multiple line items.

4. Be realistic about your budget.

5. Bid the project out at the Sub-contractor level.

Let’s take them one at a time…

1. Identify all scope items up front.

The key to control costs is planning. The last thing you want to discover during construction is that since you are re-doing the Kitchen and Dining room floors, the Living and Family room floors will need to be renewed as well. This may be due to some last-minute structural modifications, some dry rot discovered during construction, or maybe you just end up discovering that the old floors looked fine before, but next to the new ones, they just don’t stand up aesthetically…

Value Planning happens at the Design Development stage; before engineering (if needed), before permits, and especially before completed construction drawings.

This is done by conducting a formal Constructability Review. At this meeting, you and your team (chief Designer, chief Builder) sit down, walk around, and contemplate everything that could possibly come up during construction. Could there be some dryrot under the window? How will the old floors look next to the new? The most important question to ask is: How will the work we are going to do physically impact the finishes in areas where we are not working?

Answering all these questions and spending time looking hard

at everything in minute detail up front will save many heartaches (and wallet-aches!) during construction.

2. Break your project down into it’s significant scope components.

Your Builder needs to be reasonably skilled in spreadsheet design and manipulation. It’s all about information management here, and you will need a sheet that breaks out your project into separate columns of scope components. One column each for the Addition, the Master Bath, the Kitchen, the Dining area, the Bedrooms. This way, at the bottom of each column, you can see the total price for each component of your project.

3. Break those components down into multiple line items.

Spreadsheets have columns and rows. As mentioned above, the columns do the work of scope components, and the rows provide cost details on finishes, fixtures, individual sub-contractor scopes, and major pieces of the construction such as framing, dryrot repair, interior trim, etc.

It’s the Line Items in the Rows where you get to clearly see your scope and design choices and how they impact the budget.

When you have this kind of visibility and transparency, your ability to manipulate the project and it’s design is complete. Here’s a metric: For a project like this, your average line item should be around $1,500.00. More than that, and your just not getting the level of breakdown you need to be able to significantly affect the budget.

4. Be realistic about your budget.

Humans are humans, and what we see time and again is a planning process that removes scope items only to add them back in during construction. If you don’t do this, you will be the only person in history to have pulled it off. Everyone does it, the key is to keep it at a minimum.

Adding things back in during construction costs more than if they were in there in the first place. The disruption of schedules, sequencing, the tearing out of newly-installed work(!) all add to the overall project cost.

Deciding how much you want to spend is a very personal process, and very human. Be truthful to yourself and your team about your goals. Enlist their support in these decisions. Believe me, we’ve seen it all and we are there to serve with compassion…

5. Bid the project out at the sub-contractor level.

Wouldn’t it be great if you could look at each General Contractor’s bid and see the prices they are getting from their subs? (you should be able to, by the way…)

What if you could then look at the bids and say “Wow. I really like that guy’s plumber! And that guy got a great price on the painting! And the last guy’s roofer is clearly hard to beat!”

Typically, you have to take the aggregate of the subs that each General Contractor offers as the overall price for the project.

But you can do better.

When you have your General Contractor bid the project out at the Sub-Contractor level and share all the results with you, it simply stands to reason that you’ll be getting the best price you can get for your project. Insist on it. The General Contractor should have adequate measures in place to ensure quality control from anyone who works on the job. Ask about them.

Got a question about your home? Here’s your chance to “Ask The Design-Builder”! Give us a call at 415-459-3349 or send your question to john@theperfectbuilder and we’ll answer either in this blog or by e-mail.

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  2. […] Now take that and apply it to every aspect of your project and you quickly see how these kinds of breakdowns can give you significant control over your construction budget. […]