Step 2 Building or renovating: Work out your budget.
Continuing from “Where to start when building or renovating” you are now equipped with boundary set-backs and amenity location ready to start thinking about your budget for your new house, renovation or extension. To be able to tender out your project, approach architects, designers or builders you need to have a fair idea.
Ask yourself these questions:
- What you can afford to spend and how far you want to stretch financially? What cash do you have and if you borrow the funds, what amount can you afford to pay back? Do some sums and work out your weekly monthly repayment amounts
- If renovating or extending your home; how much is your home worth and how much can you spend before you over capitalise?
- Is this your long term home or are you doing this to sell and move on?
So what do things cost and how do you work out a budget? Honestly speaking, until a complete analysis has been done on your site or existing home it’s difficult to apply a one size fits all square metre rate to all building projects. Simply because there are so many variables.
The site conditions & location.
Difficult and sloping sites can add to excavation and foundation costs because there is more surveying, engineering and technically involved. For example, steep sloping sites with limited access require more labour and potentially equipment hire (a crane or booster) to get tools and materials to the site. West facing sites will require more insulation and cooling because these homes are always prone to over-heating in warmer months. Older houses, in particular, are prone to hiding problems behind nicely plastered and painted walls.
Custom vs project home. Projects homes on the surface are cheaper to build because they benefit from economies of scale across 100’s of homes with the same or similar design. If you have a flat building site, can stick to the design and not make any design alterations, you may get a cheaper home.
The finish quality. Do you want high quality vs standard finish for fittings, materials, cabinetry, appliances, heating, and cooling…this can have a big impact on each direct cost in the project.
Permits, relaxations & certification. If your boundary set back doesn’t allow enough space and you require a relaxation there may be other indirect costs from surveying and designing incurred.
The building size & complexity. Generally, the more complex the shape, the more expensive each square metre will cost. If you have an architectural design they do tend to be more complex and technical – not run of the mill. Hence the reason you choose an architectural design.
It’s fair to say that unless you have a bottomless wallet; building, whether it be a new home, renovation or extension is a happy compromise between what you can afford and what you want.