Budget

Set a budget
Setting a budget at the beginning of the project enables you to make informed choices when searching for products and materials. Whether you do-it-yourself or hire someone else, conduct preliminary research on materials and labor costs to make sure your budget is realistic. 

Shop around
As you have probably been told a thousand times, do not buy the first thing you see. Once you find the material or service you are looking for, shop around. You can often find the same items at a cheaper price, just by doing a little legwork. The Internet also gives you access to materials you may not be able to find locally.

Shopping around also means comparing the costs and skills of professionals. Try to hire pros who can implement your project, meet your rates, and compliment your personality.

Be willing to compromise
The chic bed and bath boutique has exactly what you want, but another establishment has a really close replica at only half the cost. Compromise! Rate items-to-buy in order of importance to get an idea on what you will and won’t compromise on.

Upgrading products and materials?
Stick with your budget. If you only have finances to cover a certain amount of rehabilitation, then pick materials and products that will fall within that amount. Picking a wide range of affordable materials and products allows you to upgrade and cut back at will. When selecting materials and products, consider the quality as well as price. Sometimes cheap will cost you more in the long run if you have to replace an item sooner than expected.

Asking the contractor to do additional projects?
The contractor is there to do a specific job, not to be your personal handyperson. Every extra task you ask of them comes with a price tag. If you just can’t change that light bulb yourself, or must have the contractor fix a leaky pipe, inquire about the cost of the service beforehand and get it writing, preferably in a new contract order or as an addendum to your existing one. You don’t want to be surprised when you get the final bill and find the “can you do that?”'s have put you over budget.

Allow for unforeseen discoveries
No matter how much advance planning you put into a construction project, structural, electrical or mechanical problems can be “discovered” once the project is underway. Although they weren’t part of the original scope of work, once revealed, they must be dealt with. The best strategy to prepare for these unexpected costs is to add a contingency to your budget: at least 20% of the total construction cost. You might be able to reduce that amount to 15% if you thoroughly plan during the pre-construction phase by getting a general contractor or a building inspector to review your plans. Still, as rule of thumb most initial rehab estimates are low.

Utilize the services of a home and building inspector
Especially if your rehab involves extensive remodeling and/or construction. Inspectors are licensed by the state to know “construction detailing.”

Architects are trained building and space designers, but inspectors check “workmanship" -- where quality and expense lie in the details. Your interior design person can coordinate and harmonize the design aspects, but your inspector will know how it should be done.

Consider making all contract payouts subject to a professional inspection. If the work is inadequate or dangerous, the inspector can tell you, and you can make the decision on whether or not to pay your contractor, have the work corrected or seek services from another contractor. Expect to pay your inspector around $200 or more for each payout inspection. In addition, get a written and signed report from your inspector. See Chapter 18: Inspections for additional information.

TIP: If your rehab project is for a business or nonprofit organization, ask your accountant to review the budget. See Chapter 4: Professional Services for resources on hiring an accountant.