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With any building project there are many unique differences and diversities that are specific to every property and project. The process you embark on for your building project has various stakeholders and invested parties that can cause complexities along the way. Due to these complexities in the building process, problems, errors and miscommunications can arise. Avoiding these completely may be idealistic, however there are some common mistakes that having the knowledge of will assist in evading them.
3 common mistakes that we have observed over our time in the industry:
1. Over Capitalising
This is a common error that owners make particularly when looking to sell. The idea that more will equate to more is incorrect. If you were to own a property worth 1.5 Million and did 500k worth of renovations prior to selling, this does not guarantee your property will be worth 2 million dollars resale. In fact the local market may only value your property at 1.8 million, meaning you have lost 200k.
If you are well acquainted with over capitalising this may sound elementary but it is extremely important to understand when undertaking a building project.
The key is knowing the local market in regards to property value and local trends i.e. if beach shacks are the local trend, building a red brick project home may not be the best option. You first want to assess whether or not the money you're spending on renovations will actually translate into property value (see our blog called “3 renovations that add value to your property”).
Questions like “are we trying to do too much” and “do we need to spend that much on mod-cons” are helpful questions to ask. Finally, employ a builder that you know and have a good working relationship with, that will work to ensure they stay within your budget (see our blog “Preparing for your renovation”).
2. Taking the cheapest quote
Taking the cheapest quote for anybody with a tight budget makes sense and temporarily eases the pressure of cash flow. However, with any cheap quote there is more than likely an accompanying catch.
Unfortunately that catch commonly doesn’t surface until the project is underway and is now complicated and expensive to correct. When analysing quotes, it is important not to assume that the cheapest quote is the best quote for you.
Making your decision based off the quality of work and reputation of the builder providing the quote is beneficial in the long run. It may be more expensive but often saves you long-term.
We like to make sure that our Trentwood quotes have a clear and understandable breakdown of pricing and related work so that our clients are fully aware of how the quoted price equates to the quality of the final product.
3. Funds to finish your project
Not having the funds to finish your project before it commences is one of the most common mistakes made in building projects. When a homeowner is setting out to renovate, they often have a misinformed valuation of how much what they want will cost.
For example, as has been mentioned in previous blogs, the price and time of constructing foundations is not in proportion to the remaining aspects of the project. In other words “A lot of your budget gets buried!”.
Having a correct understanding of how much your project will cost from start to finish and making decisions according to what you can afford will save you many a headache in the process of your building project. The time lost and debt accumulated due to poor valuation of how much funding is required to complete the work is a very common mistake in building projects.
The mismanagement of funding will always cause unnecessary pressure and stress on the building project, which leads to a more problematic and a lower quality final product.
Being aware of these common mistakes and how to avoid them, will assist you in the decision making process of managing your building project to get the results you are looking for.
Have you encountered any other mistakes leading into a building project? We'd love to gear about them in the comments below!