How to cut costs during a renovation

How to cut costs during a renovation. Image credit: Pexels

How to cut costs during a renovation

(Partner Content) Homeowners or property developers often choose to renovate their property rather than moving either due to the costs of moving or perhaps they don’t wish to move from the area.

How to cut costs during a renovation

How to cut costs during a renovation. Image credit: Pexels

However, the dream of designing and building a perfect renovation project can often come with several challenging curve balls, resulting in both project timeframes and finances being bumped off track.  

An array of scenarios or circumstances can cause project delays or additional costs, for example, material prices increase, findings of unexpected items such as protected animals or plants onsite, or planned processes require changing.  

Even during projects that do not face such challenges, the everyday costs of designing, building, managing, and decorating projects can be expensive and therefore homeowners and property developers may choose to cut costs in certain areas in order to fund a ‘splurge item’ or undertake a larger renovation.  

No matter the reasons behind the desire or need to rein in the purse strings, this article will provide some ideas that can be explored to save some money on renovations.

Please note as as every renovation project will differ due to the very nature of building works and site differences, this article can only provide general advice on differing ways to save money during such projects.

Make a Budget

During the planning phase of a renovation project, it is important to set a budget for the entire build, including a rough cash flow of when larges expenses are forecast and detailing the sources of funding to cover the budget.

In order to build a budget significant research will need to be undertaken in order to establish costs for each of the elements of the renovation project.  

Multiple quotes for each element should be obtained in order to check that prices provided are in line, meanwhile homeowners and property developers should be warned against selecting the cheapest option as sometimes things can be too good to be true!

Once all the prices have been obtained and collated in order to build a project budget, the homeowner or property developer should consider adding a contingency budget in order to cover unexpected expenses.

Finance Appropriately 

We have briefly mentioned that renovation projects must be planned out including summarising how each stage will be funded.  If the homeowner or property developer require finance in order to proceed, this should be put in place ahead of the project commencing.

There will be a wide variety of finance options available depending on:

  • The scale of the project
  • The value of finance needed
  • The equity level or other assets owned to put down as collateral 
  • The credit-worthiness of the homeowner or project developer, including the amount of debts or liabilities attributed 
  • The duration of the project and the stages at which finance is required
  • The plan for the property or development including how long the money is needed to be borrowed for

Once all of the above factors are known the homeowner or property developer can explore the finance needed.  There are a range of options available from short term solutions such as a personal loan or longer term solutions such as:

  • A residential mortgage if the homeowner is due to reside within the property following the renovations
  • A buy-to-let mortgage if the property is due to be leased once renovated
  • Bridging loans if the borrowing is required on a relatively short term basis, with additional benefits of flexibility and speed of arranging the finance

Obviously, all lending will incur additional costs such as arrangement fees and possibility exit fees in addition to interest.  Therefore, it is important to plan out how much is needed to be borrowed and the minimum duration of term in order to save on interest fees.

In addition, the type of borrowing will dictate the interest level applicable for example buy-to-let mortgages tend to have more interest applicable than residential mortgages, therefore this should be considered also.

To find the most suitable finance, on the most favourable terms available, it would be recommended to seek the advice of an independent mortgage broker who can assess an individual’s personal circumstances, project requirements as well as access the whole of the market to find the ideal financial solution.

It’s also always worth making sure there are no government grants or subsidies available, this is particularly true for green home improvements, for example boiler grant schemes.

Plan a simple design 

When designing the layout of a property for a renovation project it is worth taking time to consider the complexity of the proposed plans.  Often it is found that the more simple designs cost less in both labour and materials, therefore any simplification that can be undertaken during the design phase is worth exploring.

Undertake Tasks Yourself (Where possible)

Where experience or knowledge and time permits, consider undertaking tasks yourself during the project itself in order to save on labour costs. Whether a homeowner or property developer can only feel they can commit to painting for example, this still would save on decoration costs, however if the skill set permits other tasks such as digging ahead of foundations being laid or plastering for example could all save the project budget.

Sourcing and Comparing Material Suppliers

There are many options of sourcing materials these days including builder merchants, reclaim yards or direct with suppliers. Some sources may require an account to be opened in order to make purchases and sometimes suppliers may restrict the type of accounts they offer, for example for builders only, however it is always worth exploring. 

Meanwhile some suppliers may offer discounts on certain products, their own range or for bulk purchases, therefore it is worth comparing quotes and even trying to haggle between suppliers.

In addition, it is worth analysing the whole renovation project for any areas where materials can be reused or even shared. 

For example, if any walls are to be taken down to rearrange the layout, can the materials be reused elsewhere, or even when choosing tiles for example, could the bathroom and kitchen floor times be the same for example to increase one order for any bulk discounts and to save labourers switching between products of different shapes and sizes.  

Another example of saving costs with a kitchen development are to keep the cupboard casings in the condition allows, hanging new doors and installing new worktops for a new look finish.

It is also worth shopping around for the finishing touches such as taps or other fittings, both between suppliers that may differ on pricing, as well as considering second-hand items from private sellers. 

For example, if you are getting new windows installed, it’s always advised that you get multiple quotes, rather than accepting the first one. 

Hire Contractors

When a decision has been made that expert are needed to be hired, it is worth considering splitting contracts into specialisms using individual suppliers for specific tasks such as bricklaying, electrical fitting, roofing. Often by doing so, the best prices can be sourced, and the project management element is not subcontracted.

Again, it is highly advisable to seek a minimum of three quotes from a range of contractors to compare prices.

How to Cut Renovation Costs Summary

We have been discussing a range of ideas that can assist to keep renovation costs down during projects; from the beginning during the design and planning phases, throughout the project itself by differing ways to source materials and split contracts, as well as considering second-hand finishing touches.

We also covered several different finance options that may be available and the importance of the terms of borrowing including interest payments. It is recommended that advice is sought from an independent financial advisor to review the entire situation as well as the applicants’ personal circumstances, before making applications.

Specialist brokers often have access to the entire financial market and can therefore provide a wide range of quotes from a wide variety of bridging lenders.