There is probably not a week that goes by when I am not talking to someone about a renovation job that exceeded the expected budget, sometimes catastrophically and significantly.

I have real-life examples where the cost has doubled or the full cost has been reached and the job is a little over halfway complete.

Well, it doesn’t have to be that way.

These, in my experience, are the top reasons why there are such huge (and frequent) cost overruns on renovation and refurbishment building projects.

No. 1: Poor cost estimating . That is , the budget was too low to begin with. 

This can be caused by inexperienced people or an incomplete list of items that should  have been included.

No. 2: Things change. You can’t expect a budget done at the start of the planning and scheming stages to stay that way once all of the design work is completed and during construction. 

Plans change during design for a variety of reasons, obstacles and restraints of the site come up during due diligence, local council requirements need to be taken into account, to name the start of a long list of reasons why your building project might change during the course of the design and build timeline.

So it is important to keep reviewing the plans , engineering, geotechnical information as it comes to hand, not to mention your changing requirements and ideas.

No. 3: Cost rise. It is sometimes said that “the cheapest time to build is today”. 

Generally, the cost of labour and materials increases over time, and this can happen over the timeline of your project, that is, from initial concept design to procuring suppliers and locking in quotes.

Other ideas to consider while putting together a budget for your refurbishment, renovation, or even brand-new home:

If you need a fixed lump sum for a project, you should expect to pay a higher price overall.

Factors that are unknown and cannot be predicted will need to be factored in to protect the supplier.

Provisional sums, provisional items, and price cost sums are legitimate methods for being flexible and fair in meeting unknown factors during the construction and resolution process, benefiting both the supplier and the supplied.

Renovation cost overruns are common due to poor cost estimating, changing project requirements, and rising costs. To avoid these issues, it’s important to accurately estimate costs, review plans and information throughout the project, and consider flexible budgeting methods.