Monday, August 10, 2015

Optimizing The Budget When Renovating Your Home

Optimizing the Budget

The ability to ‘value engineer’ the project is one hallmark of an experienced pro.
Stretching to get the most value for the dollar is a sport we all love to play. This certainly applies to a home remodeling project. It’s not unusual for the homeowners’ vision to be out of sync with the budget. Although this can be discouraging, a professional remodeler can suggest creative solutions that reduce costs while still delivering that vision.

The method for finding these solutions is called ‘value engineering.’ This is really just a fancy term for doing everything in a way that optimizes the return on every dollar—but pulling it off is easier said than done.

One of the differences between a merely competent remodeler and a real pro is the understanding that value engineering is not a random cost-cutting exercise; instead it’s a systematic and thoughtful approach to satisfying the homeowners’ most important needs using the funds they already have.

Items that can be value engineered include the project design as well the materials and products that go into it. The remodeler will scrutinize the plans and specifications (or the homeowners’ concept, if plans haven’t been drawn yet) and suggest alternatives that lower costs while maintaining quality.

The goal is to support the homeowners to make informed choices.

Most people only understand these types of tradeoffs in broad terms. They know that granite countertops and solid wood cabinets will cost more than laminate counters and wood veneer. But obvious contrasts like that aren’t what we’re talking about.

Real value engineering is more subtle. It’s not unusual to be able to shave thousands of dollars off the budget for a big remodeling project by making a lot of small adjustments that only minimally impact the way the new space looks and feels—if you know how to do it right.

How does the remodeler know where to make those adjustments?

By asking the right questions in the right way, identifying patterns in the answers, and reading between the lines. A remodeler who is good at this can often uncover priorities that the homeowners weren’t able to articulate. Solutions can then be tailored to those priorities.

For instance, it may become clear that some spaces can be altered while others can’t. If the homeowners have more enthusiasm about the master suite than the kitchen, they might be amenable to less-expensive fixtures in the kitchen but not in the bath. Where substitutions must be made, the trick is in knowing which lower-cost materials and design features will deliver the needed performance, aesthetic, or warranty features, but without increasing maintenance costs or reducing the home’s longevity.

If the project is an addition, value engineering may include reducing exterior wall space by simplifying the facade. Exterior walls cost a lot more to build than interior walls, so a facade with fewer corners, nooks, and crannies will require less materials and labor. Changes could be as simple as moving windows or doors a few inches to eliminate framing members, or as complex as adjusting the footprint of the new space to make more efficient use of materials.

It can even mean working with subcontractors to rethink pipe, wire, and duct runs. In fact, good value engineering is a team effort, and a good team of subcontractors will be accustomed to helping make it work.

Remodelers who do this well are able to draw on deep design and construction experience, solid business processes, and very good people. Those attributes are, of course, the hallmarks of a pro.

Warm Regards,

Doug Abbott
Village Builders

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