More than 43% of Australian homeowners are planning a renovation according to a recent survey. If that sounds like you, make sure you’re not one of many people also poised to blow the budget.
According to research, the average renovation goes over budget by nearly $3,000 due to unexpected material and labour costs. But that’s not all.
The same research shows that the average renovation takes 58% longer than expected. If you’re renovating an investment property, extra time could also mean more time without a tenant, and less rental income which could really inflame costs.
What causes a renovation to go over budget?
Renovation projects usually go over budget because costs are inaccurately projected.
Costs for any renovation—no matter how small—need to be calculated before any work is carried out. And for a prospective property in need of renovation, the renovation costs should be worked out before an offer to buy is even made.
That means instead of conjuring a ballpark budget figure of say $40,000, you need to work up from exact costs to a realistic total cost. For example, you need to factor in everything from the number of power points required to the doors that need replacing to arrive at a true cost – in time and money – rather than a vague estimation.
The solution to staying on track
Whether you’re updating or undertaking a complete overhaul, you can keep your renovation on budget—and on time—by keeping the unexpected at bay.
The AMP renovation budget tracker has been invaluable to the contestants on The Block—and the good news is it’s now available for you via tracker.qandamp.com.au
Manage all the costs of your renovation from your desktop, and make sure you stay on track throughout your project.
Consider our tips for your keeping your renovation budget on track:
- Use the AMP renovation budget tracker at tracker.qandamp.com.au
- Thoroughly plan everything—for example, map out your floor plan in detail and finalise the placement of permanent fixtures in your kitchen and bathroom before undertaking any work.
- Project-manage the renovation yourself but beware unexpected traps. Speak with professionals about realistic time frames and the time you’ll have to invest.
- Shop around and negotiate—compare quotes for materials and tradespeople but remember cheapest may not always be best. Ask for references when choosing tradespeople and get referrals whenever possible.
What you need to know
The above tips should be used as a guide only. AMP and its related companies are not liable for any claims, losses, damages, costs and/or expenses sustained or incurred in connection with the above tips. Any advice on this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters and consider the Product Disclosure Statement before making a decision about the product. AMP Life is part of the AMP group and can be contacted on 131 267. If you decide to purchase or vary a financial product, AMP Life and/or other companies within the AMP group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium you pay or the value of your investments. You can ask us for more details.