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Clients should not pay more than 20 per cent of the renovation costs as an upfront payment to ID firms or contractors, says our guest.
.jpg?itok=Rk6yAREG "Money Talks Podcast: How to avoid turning your dream home renovation into a financial nightmare")
From budget constraints to moving timelines and working with contractors – renovating your home can be a mentally and financially draining process.
In this week’s Money Talks, Qanvast co-founder Daniel Lim shares tips on how to navigate the renovation journey without breaking the bank.
Here’s an excerpt from the conversation:
Andrea Heng:
How much of a renovation budget should actually include your loose items, the furniture, the appliances? Because I’ve always been confused about this. When you say renovation budget, in my mind it’s just the renovation.
Daniel Lim:
You’re right. Some people get confused.
Andrea:
So should it include the furniture, the appliances and all that?
Daniel Lim:
The numbers or figures I gave earlier was just for the pure renovation, the works, the construction, your masonry, your hacking and all that. It does not include the loose furnishing or your appliances. That’s also what you would get from contractors or interior designers you work with. Whatever they quote would always not include appliances and loose furnishing.
So it’s important to then set aside another budget for that, typically about 30 per cent of your renovation budget. So assuming you go with about S$60,000, you will need (about an) additional $20,000 for the appliances and furnishings.
Andrea:
Yeah and the bigger the house … the more stuff you think you need. You talked a little bit earlier about making space for surprise expenses. You’re in the midst of renovating your own home now. What are some of the surprise expenses that you personally are encountering right now?
Daniel:
I think sometimes people underestimate the need for electrical points. (I realised), “Oh, I need more.” So I think that’s one cost that caught me a little bit by surprise.
Carpentry was one as well … So I think those are, those will be the kind of built or renovation surprise cost that might come in. Or just adding a new feature.
Andrea:
For me, that was doorknobs. (I wanted) those small aesthetic features.
Daniel:
But it does complete the look of the house (and) sometimes you overlook them. And I guess outside of the renovation, and of course, we don’t hope it happens, but it does happen – delays. So if there’s a delay, then hopefully you already have your existing dwelling (and) you’re not renting.
But if you are renting, or you have already maybe sold your house, and you were expecting the renovation to finish next month, and you’re going to move in next month, and then there’s a one month delay, then what happens right? And then you scramble.
And one of my favorite words again – buffer. I think you need to buffer for (delays). Don’t cut it too close, because it causes a lot of unnecessary stress.
