BUDGETING

HOW TO SAVE MONEY..

If you are about to undertake a renovation or garden makeover and you are nervous about the likely cost, the best way to save money is to actively manage it yourself.

The following are our suggested ways to illuminate the stress, have your project run smoothly and successfully and avoid nightmare scenarios.

Do your homework at the start of your project

Decide very clearly what the desired outcome of the project is. i.e. is it a personal project, fix to sell (or build to sell), or improve your own standard of living. It’s not just about cost, it’s about time, complexity, energy, capacity, risk and how best to satisfy your requirements.

Lock in an overall project “spend”. Otherwise you are in the land of wishes and denial. Your decisions are not real until there is a cost and decisions can't be made unless there are some criteria to help eliminate some of the thousands of options you have.

Prioritise your needs and wants. What is negotiable vs not negotiable. This also helps eliminate some of the thousands of options you have.

Define the big picture

The strategic design decisions you make at the beginning of your project when you formulate your project brief will have the largest impact on your project costs. Unfortunately there is very little if any saving to be made by fussing over the price of pavers towards the end of construction.

The more strategic you are, often the greatest impact that can be had on cost.

Two elements affect cost more than anything else: Size and complexity of construction.

A larger home will be more expensive than a smaller home. Flat or Monopitch roofs, upper level balconies and obscure shapes can look amazing and also require expensive construction.

Have us prepare a budget estimate of cost at sketch design stage.

If you don’t have some handle on the overall project cost early, then its near impossible to manage costs and make decisions accordingly. Knowing your rough numbers early helps with selections, methods of construction and cost allocations.

Waiting until the final tender process, or until you are building on-site to make changes, can waste a lot of peoples time and money. In our experience the industry is at such a capacity that contractors are reluctant to spend time on something that is unlikely to proceed. Re-quoting and optioning is not happening the way it used to and suppliers start to opt out of pricing after two revisions.

Take out some of the larger items that you can supply to save money on builder’s margin.

This comes with a big warning whilst this strategy can be effective it only really works with a few products and you must be on the ball with their supply and installation co-ordination. It is best to converse with your contractor about the possibility for your project and agree what components suit the project.

Contractors margin covers the arrangement of site preparation, supply, installation and testing and they ensure this fits seamlessly into the project timeline so if you step up to the plate you need to deliver because the contractor definitely wont!

Some great examples of the practice working are generally items at the end of a sales run or imperfect seconds that are likely to be cheaper to consumers looking for a bargain than contractors in a hurry.

It doesn't work for materials and hardware, the commercial rebates from large merchants are often much more than the retail margins can discount so with taps and paint for example contractors will often get a cheaper rate including the margin than consumers can obtain.

Construction Costs & Project Costs: Know the Difference

Your budget should always reference the project costs with an eye on the construction costs.

A construction contract of $220,000 can have a project cost of $300,000 when project costs such as consultant fees, statutory costs, items by owner, or other works associated with the project but excluded from the principal contract works. Often this can be pathways, clotheslines, fencing, landscaping, IT integration etc and costs to finish the project off properly, like window coverings and essential furniture.

Other costs incurred by owners, not within the construction costs include finance costs and rental accommodation if required for the duration of the construction build.

These costs are all project specific but if you are cost conscious, they need to be identified and budgeted for at the beginning of the project to ensure the financial viability of the whole project.

You wont save money by cutting out the architect or designer and their fees.

Saving on architects fees does not translate into a project cost saving. In nearly all cases, it’s a false economy.

Engage your architect to document your project fully.

Ironically, not doing so is the biggest mistake we see made by cost-conscious clients.