Updated: Feb 4
Budgeting for a renovation requires a determined focus on your project priorities while lowering costs through factors that influence material costs and contractor bids. Understanding these factors means embracing the fundamental concept of supply and demand and leveraging market behavior to navigate the project delivery process. We identify below some of these factors below.
"Soft Costs" in construction are costs that are not directly related to the physical construction of a building (or "Hard Costs"). These costs include design, financing, and administrative expenses. Being disciplined and judicious with your scope of work - such as avoiding work requiring a building permit and using packaged design solutions - can help you save on design and regulatory fees and significantly shorten the project timeline.
Labor cost is a variable that changes from project to project. Skill is a critical factor in the cost of labor since skilled workers are always in demand. Reduce the complexity of your project details - by reducing custom works or by using a packaged solution by Room by Color - and you open up your project to more competitive and qualified bidders. Keep in mind the seasonal demand for labor in your region might temporarily drive up labor costs (hint: there is typically more construction work in the summer).
Dedicated Work Area and Work Hours
Constraints of the job site directly impact the efficiency and pace of work. The daily necessity to remobilize the set up of materials and equipment lengthens the construction schedule and therefore drives up costs. Packaged solutions that rely on prefabricated products can reduce the amount of on-site work and even produce better quality outcomes.
Finish Tiles Selection
Tile size and coverage are variables within your control to stay within budget. Common tile sizes like 12 inches squares or 12 inch-by-24 inch rectangles tend to be the cheapest in cost per-square-foot and the most available. Mosaic tiles and large format tiles are typically more costly and limited in availability. They also present unique challenges for contractors for installation, handling and leveling ("lippage"). Innovations in the tile industry increasingly advance tile as as an affordable substitute for stone and marble.
Changes in the agreed scope of work, whether planned by you or unplanned, are usually considered as change orders by your contractor. Contractors usually quote change orders at higher than normal cost. The primary reason is because changes to work may affect the contractor's schedule and impact subsequent projects. Change orders are also opportunities for the contractor to recover from operating losses or mistakes. You can minimize change orders by having a clear and thorough plan and sticking to it.
High insurance minimum requirements by your condominium can increase costs for your contractor, and can therefore increase your costs. Elevated insurance requirements can alert many contractors to the elevated risks in taking on your project, and discourage bidders to place competitive bids (instead bidders may pad their bids for safety). It's not a factor you can change but it is a reminder of the unique circumstances influencing bids.