5 Mistakes Homeowners Make Trying to Save On Renovation Costs
Renovation does not come cheap. According to a guide done by Qanvast, it costs an average of $44,000 for a new BTO flat to $77,000 for a HDB resale flat for a whole house renovation which includes hacking and masonry works. Singaporeans will be justified in trying to find ways to cut costs. However, some cost-cutting decisions end up with the opposite effect and might even inflate the budget. Here are five common and costly mistakes:
1. Choosing the lowest bidder In the competitive interior designing and contracting industry, companies have two ways to differentiate themselves – price and non-price strategies. Companies that do not possess substantial portfolios or design chops will likely employ pricing methods, undercutting the market rate to entice sign-ups, the designs are likely duplicated and visualizations are done by 3rd party. On the contrary, those with extensive portfolios, skills, and testimonials to show for will not engage in price wars as they are confident of their quality and skills. A common mistake that new homeowners make is asking for quotations from different companies and then choosing the lowest which can potentially result in cheap materials, less-skilled contractors and inexperienced designers. Your dream home will then suffer from poor workmanship and quality that shows up after just a few years.
2. Accepting a cheap renovation quote without due diligence
Your designer contractor is the person who is responsible for your home, the space that you will be living in daily for a long time. Not only does a cheap quote might mean skimping on the quality of materials used, it may also reflect adversely on the professionalism of the company. There have been cases of scams where outrageously low quotes were given to entice quick sign-ups. In one case, a man was quoted $17,000 when market rates were around $30,000 for his flat. He was asked to give a $10,000 deposit (as opposed to the typical 10% by Casetrust standard), and only recovered a portion of his money after he realized that the company’s registered office was empty. You can read more about it here: https://mothership.sg/2017/08/guy-gets-scammed-by-interior-designer-shares-3-red-flags-to-look-out-for/
3. Ordering materials themselves instead of entrusting their designer contractor
When it comes to renovation, it is best to entrust the professionals to source for materials. For starters, they will be able to bulk order (especially if they are more established companies or have a bigger clientele base) as well as having knowledge of the cheapest sources in the market without sacrificing quality. 4. Saving on what you should splurge on; and splurging on what you should save on!
In one of our earlier articles, we wrote about how it would be unwise financially to purchase the latest QLED television if you are not going to maximize its utilization. All purchases take a bite out of the budget pie, and it would be important to be clear on which categories require more budget. Areas such as the kitchen will require more extensive and expensive renovation, but the benefits are tangible, and it typically increases the value of your home. Even if there is sufficient budget to splurge on non-essential areas or items, it is still important to exercise prudence in case of unexpected emergencies. This bring us to the next point. 5. Not planning for unforeseen costs Most renovation budgets only provide a ballpark estimate and most reality is they end up being insufficient. There is only so much that the most meticulously thought-out plan can anticipate. Even with 3-D layout models, sometimes the designer or contractor will only be able to fully determine how extensive the renovation will be after commencement. Renovation is a messy affair – it involves hacking, demolishing, dismantling, piping, and more. It is important to be prepared that unexpected costs may accrue, so that you are financially prepared and do not need to use debt to finance the project.