Renovation Budget: How to Set the Right One



This latest post is to help you set an achievable and realistic budget for your renovation project. Over the last few weeks, we have seen that the budget setting on kluje.com is a major stumbling block for many homeowners. As a homeowner myself, I am certainly not adverse to a good deal, but when it comes to home renovation, this can cause two distinct problems which will affect you.
  • Quality: Cost of materials and labour add up quickly and as the old adages go "you pay peanuts, you get monkeys" and "good not cheap, cheap not good" really do apply to home improvement. When sourcing the raw materials, there is a large quality difference between the least expensive and the most expensive items. For example, when you purchase tiles for your bathroom the price can vary from about S$6.00 per square foot (psf) to over S$ 17.00 psf. Quality also relates to durability, so that higher quality items usually need to be replaced less, saving money over the long run.
  • Interest: When you post a job on kluje.com, Contractors look at the job type and description to see if your budget requirements are realistic. If they are not then they will simply ignore your post and look for homeowners who are serious about their renovation project. So as a homeowner, you do need to be aware of what contractors are looking for, as to get the best possible renovation experience. 
For many renovation jobs there are two possible scenarios: you want the contractor to supply and fit the materials needed or you need the contractor to fit the materials only, because you have already purchased them yourself.  The first scenario seems most common and you need to account for it in your budget. Let me an example to clarify: 

Say you want to install a new water heater in your shower like this one. Lets say you purchased it at a store cause it was a great deal and you only need a contractor to install it. A good budget is S$100 to S$200, because it will depend on the complexity of the plumbing and electrical installation requirements. If you want to supply and fit the same device, you need to add the cost of the heater itself, which may be around S$200.00 Add the 2 together and you end up with $300 to $400.00 budget. Big difference.

The last point I want to make is the difference between a budget and a quotation for your renovation. Your budget is how much you are willing to spend, ie. your best guess at the final cost. The quotation is what the contractor suggests is the actual cost of the renovation project. In between these is a negotiation process, where you agree on the final contracted price. My best advice is to do your homework and see if your budget is achievable. to this end we will be publishing a price guide on our website soon. 

Taking into consideration the factors above should go a long way to making it realistic. The goal should be to try to get the budget to match what the contractor expects the job to actually cost. In the end, how do you know if your budget is realistic? The contractors will buy your job!


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