How to Budget Properly for an Exterior Renovation Project

Many homeowners don't like to discuss money when it comes to roofing, siding, or any other exterior renovation. 

We get it. It is one of the largest determining factors in what kinds of materials you’re able to use; in some circumstances, it can indeed limit things. 

However, money is a necessary topic to tackle. Understanding how finances will flow regarding your project not only prevents unwelcome surprise charges but also helps you understand what buying power you do have—and how to use it responsibly. 

That’s why we at Tony’s Lifetime Exteriors, as your Sauk Rapids roofing company, deck builder, and engineered wood siding contractor, are here with a brief budgeting basics guide below.

What Are Your Renovation Goals?

Before starting any major project or renovation, you must define your goals. What exactly do you wish to accomplish? Making this list can help you determine your budget and ensure that you do not miss anything later on. 

When defining your goals, make sure you focus on wants vs needs. What do you truly need for your renovation and what do you want? Needs should be taken care of first, such as a new roof or siding, which can have negative effects on your home if they are not updated. Wants would be something like changing the color of your siding, which could increase the costs depending on what you’re looking for. 

Another consideration when defining your goals is how the renovation will affect your future expenses. For example, replacing your windows can lower your heating and cooling costs because they’re more airtight. They’ll eliminate drafts and provide better insulation. These considerations can help you decide how much to put towards this renovation and what you will be able to afford down the line as you pay off any financing or loans. 

Once you have determined your goals, you would build this into your scope of work. This is what you will present to your contractors, which will give them an idea of what to quote. 

What Are the Costs Involved in Your Project?

The first step to creating a budget for any exterior project, be it gutter installation, window replacement, or something else entirely, is understanding the costs of such a project. 

While you may have a large lump sum set aside for the renovation, breaking that sum down into parts will give you a better idea of what materials you can use, among other things. It’s a good idea to research the average costs of your project in your area, which can help you determine how much you may have to spend before you receive quotes. 

What you’re charged for—and how much—of course, depends on the job at hand. A little roof repair, for example, will cost you far less than an entire replacement job, and you may be charged for completely separate things at completely different proportions.

Generally speaking, though, you can expect the following to factor into your renovation:

• The cost of materials

• Any remediate preparatory work

• The cost of labor

• The cost of hauling away old materials

• The cost of pulling building permits

• The cost of change orders (a topic which we’ll cover in a later section)

Typically, material and labor will be the proportionally largest costs, but that doesn’t mean they should be the only ones you budget for. 

Your contractor will discuss additional fees during consultation with you, and they’ll be mentioned in the contract you sign—so make sure to account for them while you’re crunching the numbers.

Account for Hidden Costs

The danger of renovations are hidden costs. These are costs that you will not know about until a contractor happens upon them. An example of a hidden cost might be termite damage hidden between your walls. Or perhaps mold growth in an area subjected to water intrusion. In addition, relocating utilities can end up being a hidden cost, such as relocating water lines, gas lines, electric, or HVAC units. Be sure budget allocation can cover these potential costs. 

What to Know About Change Orders

Change orders directly change the contract you sign with your contractor, and they thus directly affect how much you’ll be paying. 

A change order is an official edit to the original work, be it in scope, material, or timeline. 

This change becomes a part of the contract, making it an unshakable agreement that you and your contractor must adhere to and sign off on.

Minimize Change Orders to Stay On Budget

Change orders can be a good thing. For example, they may allow a contractor to perform remediation work they hadn’t anticipated so that your project can continue. However, it is also true that change orders nearly always drive up the price of your project. 

Why? They send ripple effects down the line of work, potentially requiring the rescheduling of workers and the updating of the paper trail on a number of levels by a number of people. 

New materials may also need to be ordered, timelines adjusted, labor paid for…, and the list goes on and on. 

To stay on budget, avoid change orders as much as possible. 

While some things cannot be predicted, such as hidden damage, you can definitely provide your contractor with an accurate picture of your needs before the project begins. In other words, don’t settle on asphalt shingles and then change your mind to a metal roof midway through the project!

Have a Buffer Budget

You can’t budget in exactitude for unanticipated changes—but you can, and should, set aside a significant amount of cash for change orders you can’t avoid. 

Recommendations for how much vary depending on the project and contractor. If you’re worried about this threshold, talk to your contractor about the numbers; they’ll be able to help you find a ballpark estimate, given the project and scope of the work. A general rule of thumb is to keep 10-20% of your budget for unexpected expenses or changes. 

Read the Contract

We all like to skip the terms and conditions, but when such a large amount of money is at stake, it’s imperative that you don’t! 

At some point, your contractor will present you with a contract detailing when each payment from the initial one onward is due and how much you’ll be liable for in dollars. Plug these into your phone, write them down in your day planner—whatever you need to do to remember that they’ll be coming up. 

You’ll avoid extra late fees that will cut into your budget this way. Nobody likes to pay in cash for their forgetfulness, after all.

Track All Expenses

Once the project begins, make sure you are tracking all of your expenses. Every time you write a check or pay someone, write it down in a notebook or spreadsheet. Keep all your receipts and invoices for all purchases and payments in a folder, or better yet, scan them into a computer.  It is very easy to lose track of your expenses and budget if you don’t write it down, and your costs can end up ballooning to a place you can’t afford. 

Contact Tony’s Lifetime Exteriors in Sauk Rapids, MN

A nearly all-in-house team combined with a passion for quality service makes us the obvious choice for your roofing, siding, gutters, and more. Give our Sauk Rapids office a call today at 320-252-9086.