7 Renovation Estimation Mistakes We See Too Often

Renovation contractor doing renovation indoor

Tuan Duong

Whether it’s updating your home or improving the features of your rental property, a new renovation project is always an exciting undertaking. Unfortunately, it can also come with many potential pitfalls, especially if you need more experience in this area.

If you’re feeling overwhelmed, you’re not alone. Our specialists at Duo Tax are here to guide you through some of the avoidable, yet common mistakes with renovation estimation that we see many Australian property owners fall prey to. 

1. Underestimating the Expected Costs of Renovations

Before starting home renovations, most of us build a simple budget for what we can afford. 

Here, the renovation estimating process begins, where we simply assume the coming construction costs, calculate materials and labour, and prepare our evaluations based on the project’s scope.

Sadly, a lot of homeowners do this before speaking with industry professionals. As a result, countless property owners need to pay more attention to elements like building resources, labour and associated costs, such as cement, paint, and carpentry during renovation planning. 

While these might seem like simple human errors in calculation, the average price of a renovation in Australia ranges between $20,000 and $200,000, meaning any miscalculation can quickly add up to costly mistakes when it comes time to do all the work.

2. Failing to Obtain Multiple Quotes from Providers

Another common pitfall many Australian property owners fall into is selecting a service provider before securing multiple quotes from alternatives in the market. 

Different builders, contractors, plumbers, electricians, and so on will offer various rates depending on their expertise, labour expenses, overhead charges, etc. 

By obtaining a single quote, you might lock yourself into a rate higher than what you could have achieved with some market exploration. With multiple quotes, you have the luxury of choosing a provider that best suits your expectations, budget, and project timeline, alongside understanding the industry’s going rates.

Just remember, opting for the cheapest quote might initially seem like a great way to save money, but in the long run, it may cost you more due to the quality and longevity issues that occurred. The balance between cost versus value will help control your budget and maintain standards, as higher quality products and skilled labour reduce the need for future repair and maintenance

3. Not Auditing Estimates

Many property owners choose not to critically assess their initial cost estimates, assuming the quotes and costs are precise without leaving room for questioning their accuracy or fairness. These costly mistakes can inflate your renovation budget and set you up for financial surprises further down the line. 

Audit your estimates by digging deeper into the figures presented. Unpack each item listed, and ask questions like:

  • Are these prices tailored to my project?
  • Is this the most affordable way to secure these materials?
  • Is the labour cost an estimate of total work, or is there extra room for overtime?

They might be difficult conversations, but you’ll better understand where your money will go and might even come away with the lowest estimate possible. 

4. Lacking Contingencies for Risks & Emergencies

No matter how much you plan and prepare, even the most unexpected situations can arise in home renovation. These circumstances and emergencies often amount to additional costs that could shatter your estimations. 

Set aside a contingency budget, ideally around 10-20% of your total budget. It won’t just be to account for the ‘unknown’, like extreme weather or supply chain issues, but also when your home renovation projects extend to cost more than the original estimation, emerging from issues like plumbing, structural alterations, electrical work, refurbishing old fixtures, and more.

Creating a contingency fund provides a financial safety net, avoiding the unnecessary stress and anxiety that usually accompanies surprise costs and delays.

5. Working with Inaccurate Take-Offs

A ‘take-off’ estimates certain elements or stages within a construction project, such as materials and labour, to help make the process more manageable.

Just one inaccurate take-off can lead to a disruption in scheduling, misplacement of resources, budget overruns and unnecessary delays. 

For example, underestimating the quantity of materials and labour needed can result in inadequate supplies, halting your project and increasing costs with rush orders, but overestimating can end up in wasted resources and inflated prices.

By engaging with an experienced construction estimator during the planning stage of your project, you can stay optimistic that your resources are being well spent during the renovation.

6. Neglecting ‘Hidden’ Costs

Property owners must also pay more attention to the associated fees with their renovation projects, such as permits, inspections, or unexpected delivery fees. 

It’s important to research these hidden costs and budget for them from the outset of your renovation estimating process.

You can’t avoid these expenses, so prepare for the financial obligation a renovation can entail and carefully allocate your budget for every detail – even the ones you only ever see on paper.

7. Investing in Professional Construction Estimation Services

Renovating a property isn’t just about slapping on a fresh coat of paint or adding a few chic pieces of furniture. It involves more complex jobs like installing new plumbing or wiring systems, tearing down walls, or building extensions. In short, these tasks need meticulous planning and professional handling. 

In order to do this while simultaneously managing the budget, suppliers, and schedules and finding time for other aspects of your life is a lot easier said than done.

Fortunately, investing in construction estimation services can help, providing you with:

  • Comprehensive Notes: You will receive an in-depth breakdown of costs, timeline, labour, and materials required for your project(s).
  • Time-saving: Allowing an expert to tackle the tedious work of cost calculation saves time for other processes like design and implementation.
  • Financial accuracy: With their in-depth industry knowledge, estimation services like Duo Tax and Estimators can provide the most realistic costing. This minimises the risk of going over budget due to unforeseen expenses.
  • Expertise: Professional estimators have a keen eye for details, ensuring that no aspect of your renovation project is overlooked. This contributes to the overall quality of your renovation.

Investing in professional construction estimating services is an intelligent way to manage your renovation project, ensuring efficient resource allocation and reducing risks. If you want to learn more, speak with our experts at Duo Tax QS today to get started.

Duo Tax team working together

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Disclaimer: Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek a second professional opinion for any legal or tax issues raised in your investing affairs.

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Tuan Duong

Tuan is an award winning Quantity Surveyor and leads Duo Tax Quantity Surveyors – Australia’s fastest growing provider of Tax Depreciation.

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