Why nobody can tell you exactly what your renovation will cost.

It’s a challenging question... Is your dream kitchen $75,000 or $250,000? Actually, it could be anywhere in between. Here are some insights I share with my clients when embarking on a large renovation.

Every project is unique.

While designers and builders can give you a ballpark number based on experience with past projects, every space is different and costs are always in flux. While your neighbor’s new kitchen cabinets cost $25,000 two years ago, yours may be $35,000 today.

Builders quote projects differently.

It’s true. There is no real industry standard to estimating the cost of a project, and in fact, is one of the most challenging parts of their job. One contractor might submit a low bid, only to follow up with change orders for those beautiful upgrades you’ll no doubt want, resulting in a higher overall cost. While another contractor may provide a higher initial bid to cover the unforeseen expenses, allowing for greater flexibility to complete the project within budget. This leaves you with two vastly different cost estimates—how can you know which is accurate?

When in doubt, it’s usually the higher number.

Finish materials account for 40-60% of your overall project costs.

While a contractor is knowledgable on labor and building costs for a project, he has no idea if you plan to select a grade 2 quartz or a grade 7 marble countertop; if you prefer GE or Viking appliances; or if your tile will be $8 or $28 a square foot. Interior designers are knowledgeable on finish costs and can help you select appropriate finishes, providing you and the contractor a more accurate estimate before construction begins.

Unforeseen costs will come up

Even if you plan your project down to the garbage disposal, home construction comes with unforeseen surprises, particularly in older homes —like outdated electrical systems, plumbing that requires relocation, a rotting sub-floor, and so forth. Always budget for the unexpected.

So, how does one budget for a major renovation?

As a designer, my goal is to create spaces that my clients can take pride in and I dislike seeing them fret over every dollar spent. After receiving preliminary estimates from your contractor, add a contingency of 25% (if they haven’t already done so). If you find that you don’t need the additional funds, that's wonderful! But, it's better to plan for it than to risk being unprepared.

Next, take 50% of the original estimate; this will provide you with an approximate budget for finishes such as appliances, cabinetry, tile, lighting, faucets, countertops, etc. With this approach, you can start planning your space with a clearer understanding of your budget for final selections, while having some buffer for unexpected expenses or desired upgrades.

Example:

Estimated renovation costs: $150,000 + 25% Contingency = $187,500

Finish Budget (50% of 150,000) = $75,000

Don’t forget the furniture.

And don’t forget about the furniture and window treatments. Nobody wants to complete their renovation, only to realize they have no budget left to buy the kitchen table. Furniture is a part of your home too and needs to be included in the scope.

In summary, renovating your home can indeed seem like a gamble. However, involving qualified designers and builders from the start, along with being transparent about your budget, will set more realistic expectations for you and help reduce unexpected costs.