We are getting ready to close on the sale of The Puzzle House this week, and I’ve finally received all the final invoices and receipts from this rehab to determine where we stand on budget (see final numbers broken-down below).
This project was a bit different than most of our others, in that we used a General Contractor to do most of the work. Instead of the GC providing a fixed-price bid at the outset of the project (which would have been VERY difficult, since there were a LOT of unknowns), we agreed on a “cost plus” model, which basically means that he passes on all of his actual costs, plus he gets a fixed fee for managing the project and supplying the contractors. So, the final budget was a reflection of the actual contractor costs, plus a GC fee for his management.
Because there were a lot of unknowns, because it was a big project and because we were using many of the GC’s contractors, it was tough for me to estimate the rehab costs upfront on this one. My original estimate was $45,000-50,000 for this project, but we ended up around $54,000. There were several reasons for the overages:
- I budgeted about $2500 too little for electrical work. Part of that was poor budgeting on my part, and part of that was that our electrician was required to do a bunch of work by the county that he didn’t expect (and therefore I didn’t expect). Another part of the electrical overage was from the HVAC contractor screwing up and installing an electric heat-pump instead of a gas furnace, which required an upgrade to the electrical panel and some additional wiring. Technically, this was a contractor mistake, but the work was done, everyone made a good-faith effort, and I’m not going to make my contractors eat the extra cost (that was about $750 of the overage).
- We ended up doing some nice trim work in the living room and dining room. This required some design consultation and a good bit of additional carpentry. We also decided to go with some upgraded molding in the dining room and kitchen. This ended up being an extra $1000 or so.
- When we asked the county for our final inspection and Certificate of Occupancy, they came back with two requests I hadn’t expected — insulation throughout the crawl space and replacement of a non-tempered window in the master bath. These items ended up being an extra $1500 or so.
- I under-estimated the cost of the structural work we needed to do by about $1000.
- We decided to upgrade to granite countertops instead of our typical laminate. This was an extra $1000 or so.
- We had a lot more inspections than I had anticipated, and my GC offered to have his guys wait around for the inspectors on each occasion. While it freed up my team from having to sit and wait for inspectors, it still cost money for all the waiting around. This was probably another $500.
Between those five items, we were over budget about $7500. We saved a little here-and-there in some other place and went over a bit in some places, so that $7500 above was pretty much the overage for the project. Not our best work in terms of budgeting, but the renovation turned out great, we learned a lot, and in the scheme of things, 10% over our (maximum) budget isn’t a disaster. I’m actually very happy with this project as a whole.
Here is a detailed breakdown of the final budget numbers: