Understanding Your Numbers on a Build

Costing a build can be the hardest part of understanding the costs. The key to this is focusing on having the right allowances from the beginning and not just basing this on how much money you have available – as this can lead to wishful thinking.

Now to work out how to calculate the right allowances you will need to consider the following processes:

1. Know how you will run your build or renovation.

How you will run your build or reno will affect your budget and how you set it up.  A good way to think about this is to break it into little decisions:

• Will you hire a builder? If so, what level of builder will your hire – are they high-end or more of a one-man band?
• Are you considering a Blended BuildHer model? What part of the project will you look to take on? How much do you know? What do you love?
• Are you going to manage each trade and buy all of the material?

All of these above decisions will have a cost implication and although they don’t help you to work out the actual number, they should start framing your thinking as to whether you are sitting at the bottom, middle or upper part of the range.

2. Understand the size and scope of your project.

If you are doing a new build it is a lot easier sometimes to make a m2 allowance and work to this number (for example 300m2 x $3,500 per m2 = $1,050,000) and over a larger area this might be nice and accurate. We recently covered how to estimate a new build cost using an insurance build calculator here which might be some help.

Extensions can be a little harder to quantify as they will need to consider how big the area is that you are creating, how the connection will work, and is there enough volume to justify working in this way – but effectively for anything more than a few rooms, you can work in a similar way. One thing to consider is that often when we are doing this we are adding a new bathroom and/or kitchen – so we will want to add that to the m2 amount as an extra over.

Ie. 100m2 x $3,500/m2 = $350,000 + Kitchen allowance $50,000, + Bathroom allowance $25,000. Please understand that these numbers are made up – but I am trying to give you an understanding of the types of allowances you will want to make!

However, if you are doing a renovation you will need to understand how much of the internal structure and fit-out you are keeping and you will be looking more to working through trade breakdowns. In this case, you will want to work around the space and identify each item that you will want to change and add a guestimate to how much that will cost.

Costings can be difficult to manage, they are complex and there are many different components. If you are a DevelopHer download this feasibility template and bring it along to a Q&A session.

3. Consider the implications of your site and structure!

Some things can not be avoided, like building on a sloping block – it just is what it is – however other things like your choice of structure can have a big cost implication without being something you had thought about or considered in detail. Generally speaking, the heavier the materials and structure the more it will cost – timber framing subfloor, frames and lightweight cladding will be at the lower end of the cost spectrum and concrete slabs, especially suspended ones, masonry walls and lots of steel will sit at the higher end. These choices are harder to change later – so try to make the decision in the beginning before you blow the budget and need a re-design.

4. Where is the money going on your build?

Are there expensive fixtures and fittings that you have specified, do you want steel windows, floating shelves or lots of intricate joinery? Be aware of what the cost of the materials you are specifying are and how you value them.

Expensive is not bad, I use a range of materials from more cost-effective to expensive on our builds – but I always want to hero and feature the items that I am paying more for and have considered what impact they will make to the look and feel of the project.

5. Tender, quote and compare prices.

No two builders are the same and no two trades will quote at the same level. Putting time and effort into making sure that you have done your research and are happy with the materials, suppliers and have attempted to get the best price, will work in your favour.  If you are trying to work a lot into your budget have some open conversations with your builder/trades about value management, asking questions collaboratively like “is that the best you can do?”, “can you see any areas where I could shave costs that I might have over looked?” and “what would you do to save money if this was your build?” You may not pick up all the cost savings, but by opening this conversation you are setting the tone that it is important and that you are willing to work with solutions.

There is no one way to manage the budget that is better than another – but rather budgeting is a process which requires time, effort and a bit of re-designing as well as thinking on your feet. Good luck with working through the above steps and know that the more you put into thinking and working through these items strategically in the beginning, the less of a heartache you will have as you progress through your build.

And if you need a hand, book in a free 20 minute chat here and we will work through it with you!

We cover this process in depth (and SO much more) in our BuildHer and DevelopHer courses – from cashflow, budgeting, borrowing capacity, through to how to manage all of these factors and make informed decisions! So if you’re looking to build a home the right way or renovate for profit, with easy online learning, practical tools, handy templates, ongoing support, a beautiful community of like-minded women and discounts, then we have the courses to get you from overwhelmed to in control.