When it comes to renovating property, 90% of the stories you hear or see on TV make it sound like blowing the budget is inevitable. And that’s a rather daunting prospect when you’re ramping up the home loan to make the transformation happen.

But major blowouts don’t have to be par for the course with the right planning in place. I speak from experience here, having just stepped over the threshold of a pretty full-scale reno at my place. And with my OCD wife in control, planning this to the nth degree… we walked out of it all bang on budget with no extra draw downs necessary on the mortgage, much to the bank’s delight.

You might think we were just lucky, but if you know my wife, luck had little to do with it. Those OCD tendencies meant every little detail and possibility was planned for and factored in – no surprises! So here are our tips for keeping your renovation bang on budget…

The renovation at my place

  1. Get a plan in place

A soon as you get a plan on paper, you have something to work to and budget to. Architects and draughtsmen are in short supply which means it can take up to 6 months just to get concept drawings. From there you’ll need to get plans consented with the council if necessary, and have your project priced as well.

We spent a lot of time at this stage because we found our dream plan was too bloody expensive! Our original idea turned out to be a $450,000 development but we only had $250,000 to spend so there was a lot of revising and plenty of compromise!

Once you have that plan…stick to it. There’s no easier way to start haemorrhaging dollars than by making ad hoc changes to the plans and I’ve seen this happen plenty of times. A few tweaks here and there can turn into serious ‘cost creep’ and I’ve seen client’s blow budgets by $50,000 to $150,000! Don’t laugh, it happens and the home loan takes the hit.

  1. Nail your trades

Getting tradies is an incredibly tough ask at the moment – high demand, low supply with so much building happening in Auckland in particular. So network your way in. Ask friends and family to refer you to quality companies they’ve used. Interview those companies and take a look at their finished projects – try to ask previous clients their opinions on the level of workmanship too.

It’s great to have a few quotes for comparison, but don’t go overboard – it’s a pain for you chasing companies, and in all likelihood, you’re going to be wasting someone’s time, so limit the waste! I’d say two quotes are essential – it just gives you good grounds for comparison. And cheapest on paper ain’t always best – make sure you understand just how comprehensive the quote is.

Even on a small reno, like a simple bathroom or kitchen, you can have multiple trades involved… so make sure you know who’s managing them (and paying the bills!). This is definitely something to bring up at quote time – project management of a build is often an additional service, not a given, so be clear on what you want. Managing it yourself can save $$$ but can also be a huge burden. Our builder managed the project for us but there were still lots of decisions for us to make – there’s no way I’d want to do all of that myself.

  1. Get real with timeframes

Whether you’re managing the project yourself or have a project manager employed, it’s very helpful (if not essential) to establish realistic timeframes with your contractors and get them on paper. Know what you’re working to and keep the communication up if anything changes. Delays with trades has a knock on effect and can often mean dollars down the drain, so try to minimise this as much as possible.

We initially projected a 3-4 month turnaround but a really rainy August delayed things, so it ended up being almost 6 months before we moved back in.

  1. Work out your warranties

What warranties do your builder or other trades offer? Make sure you understand warranties on workmanship and materials if there happen to be any ongoing issues, God forbid.

  1. Pay away

If you have a solid timeline in place for your works, payments should be scheduled just after the work’s carried out. They should also be fully documented so you can see exactly what you’re paying for and there are no issues.

Make sure you pay your trades on time – it means you’ll be their priority and they’ll look after you, which is pretty darn important if you’re trying to keep them on schedule. And of course, don’t front up with the full payment until the job’s done and dusted. Keep a little in reserve until you’re 100% happy.

  1. Stay or go?

Depending on the scale of your plans, do think seriously about moving out of your place to get the job done. No matter the size of a project, living in a construction zone is stressful. So consider going elsewhere – it may cost a little more and put a bit of strain on the parents… but it’s better to go into a reno with your eyes wide open about the possibility, than getting half way through, flipping your lid under all the pressure, and then forking out to live elsewhere. That’ll definitely tip the budget over.

  1. Best spend?

My top tip – we got an interior designer to advise on paint colours, tiles, furnishings and kitchen finishes. Helen from Picturebook Interiors made sure there we got a cool contemporary look while retaining the country feel of where we live (Kaukapakapa). Saying you used a designer can sound a bit wanky, but it was the best $1000 I’ve spent in ages because there were no arguments, no design gaffes, and no faffing around trying to pick cushions and tiles.

  1. Finance

This should probably be the first thing you do! You don’t need fully costed plans before going to the bank because you can get approval for a specific amount subject to building consent, valuations etc and that’ll give you confidence to finalise your plans within a known budget. It’s an obvious first step and sets the scene for everything else so start that conversation fairly early.

Adding on or renovating is on the minds of many at the moment, because finding a bigger or better property in Auckland is a huge financial stretch right now. So if you’re contemplating a reno, large or small, do talk to us about the best of leveraging your mortgage to get the work done.

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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