How much money am I prepared to spend? What should I budget for cost increases and time delays throughout the life of the project?
When preparing a budget for a project, keep in mind that there are both costs for the construction (called hard costs), and costs for design, city approvals, testing, and supervision (soft costs). A good rule of thumb is to allocate approximately 25 to 30 percent of the budget to soft costs and the remainder to hard costs for those projects that include design and city approvals.
Another important factor is to have an understanding of the cost of construction in today's market. Prices for all materials and systems that use petroleum in their process skyrocketed recently. The biggest increases we have seen are in concrete, steel, aluminum windows, and anything made of plastic.
Currently custom remodels in Northern California are routinely being estimated between $350 and $500 per square foot. You may be able to bring down this price, but you may also be sacrificing the quality you desire in the process. In any case, no one wants to be surprised by the contractors' estimate, so understanding the high side of your budget early is important when starting a project.
While avoiding unplanned costs and unforeseen time delays are two primary concerns, nearly every project has both. Such surprises can come when your contractor opens a wall to find dry rot; when you discover that in the two months following the original bid, the price of concrete rose 25 percent; or when you change your mind about a design aspect during the project, etc.
In larger projects, it is wise to build a five to ten percent budget contingency into the budget. This is not money you should expect to get back if everything goes well; expect to spend it during the life of the project. Competent design and contracting professionals routinely build in contingencies for both cost increases and time delays. Owners should also be prepared.
5. Why avoid the temptation to add on to my project?
Once the vision and budget are set for a project, and the architect, designer, or contractor is hired, the process begins for design, and selecting and sourcing of materials. A competent professional will be able to design to your budget, and will inform you when you have ideas and desires that exceed the budget.
Two common areas where projects exceed budgets are when an overzealous design or contracting professional suggests ideas or materials that are outside the budget, and when an owner adds new ideas and changes to the project after the initial design has been priced out.
The simple act of adding a window to a project has the potential to increase a homeowner's costs beyond the mere price of the window. Structural framing and finish materials, as well as possible redrawing and revised Title 24 energy calculations, are costs that can accompany such a seemingly simple change.
A successful remodel project requires both discipline and open communication from everyone involved to stay on budget.
Guest 'House Doc' Joe DeCredico is an architect and principal in the firm of Garcia DeCredico Studio.
Photos: David Toerge