Knocking down and rebuilding your home is a no small financial investment. Expect to deal with banks, funding, home loans, interest, equity, credit, insurance, tax, market value, property value and settlement contracts. However, before you dive in head first, the first item of business is to plan your knock down rebuild budget.
The planning phase of a knock down rebuild project is what determines whether the experience will be smooth sailing or a bumpy ride. Even if you hire the best home builders, the journey to your new home will be a challenge without detailed plans, a clear vision, and a good budget.
This article is full of information and tips to help you plan your knockdown rebuild finance in a way that is budget-friendly. Alternatively, if you are looking for building quotes to match your budget, contact A Class for a building consultation.
Before you even arrive at this budgeting stage, you'll need to decide whether to rebuild or renovate. But the budget is where the rubber meets the road and the real planning begins.
To effectively manage your knock down rebuild budget, you need to first understand what's involved in the knock-down rebuild process.
We've highlighted 10 factors that affect the total cost of your new home build:
Because of these factors and more, a good budget is imperative for a successful home knock down and rebuild.
Regardless of whether you are building new, renovating, or demolishing your existing home structure.
The impact of the decisions you make in the planning phase of a big project like a knock down rebuild will last long after the construction is complete.
From the time taken to pay off construction loans to the functionality of the kitchen and the finishes in the bathroom - the budget is the deciding factor that will determine the overall success of your project. Let's take a look at the 4 budget items to include...
The number one place we see budgets fall apart is when they aren't comprehensive and don't cover everything they need to.
While it is impossible to predict every single variable factor when it comes to building, here are a few commonly forgotten budget items:
Whether you choose to knock down and rebuild through refinance, a construction loan, or a new home buyer loan, there are additional costs beyond loan repayments. Every financial situation and home budget is different, but questions to ask yourself include:
Unless you are a part of the small minority that can afford to pay for everything in cash, it's important to consider all the costs involved with the money side of things.
Before you knock down your house, you will have to pay to disconnect your electricity, gas and plumbing. These utilities need to be disconnected by a qualified electrician and plumber. Plus, these utilities will need to be reinstalled later down the track.
Our advice to look beyond the cost of the trades required to ensure you also include any extra costs from the power companies or water services in the process.
If you are knocking down the house you currently live in, you'll have to finance other accommodations for yourself and your family.
Make sure your budget allows for alternate accommodation and all the costs involved with moving out and back into your property.
Budgeting for yourself may include:
The timeframe of your build plays a huge role in your costs, and can often be the most unpredictable factor.
For example, it doesn't matter how good your new home builder is or how well you can stick to a schedule - no one can control the weather.
Other than the rain, three common time hold ups include:
Be realistic about how long your building process will take to build a budget that works for you.
"Most builders recommend having a budget of 20-25% on top of the per square metre cost of building."
While we strongly believe that planning is everything, it's important to realise that no matter how well you allocate your knock down rebuild budget, unexpected costs will always come up. Prepare for the unexpected with a budget buffer.
Delays and unexpected circumstances in the building process can mean higher expenses, both in the building itself and for your alternate living arrangements. Most builders recommend having a budget of 20-25% on top of the per square metre cost of building.
When planning a home knock down budget, be careful where you cut costs to make up the difference. If the costs don't match up with your finances or the size of your loan amount, you may need to seek advice from a financial specialist or your home builder.
Skimping out on certain costs may mean skimping out on home construction quality. Unfortunately, this may cost you dearly in the long run. For example, choosing a home builder with the cheapest project quote may save you money initially, but will cost more later on when installations need to be redone.
The best way to significantly reduce costs is to reduce the size of the build and intricacy of design. But it's also important to weigh the pros and cons of this decision.
When going to the effort and cost of building a new house from scratch, it may be better to save on the fixtures and finishes that can easily be replaced with a mini renovation or makeover later down the track. This is better than compromising on bigger features that are harder to change for the sake of price.
One advantage to knocking down your original dwelling is that you have the opportunity to make money that can add to a tight budget.
For example, if you have an old style home, you could sell the house to a removalist company that relocates houses, rather than demolishing it. Or, you can recycle and resell materials from the house like the timber, windows, pipes and doors.
There are clearly a lot of unpredictable variables that can make budgeting hard for knockdown rebuild projects. The best way to make sure you stick to budget and have the best chance at a smooth sailing building journey is to use an experienced builder who works well with budgets, communicates with you clearly and understands your overall objectives and goals.
Choosing the right builder gives you a safety net, knowing that things will be done by the book, as quickly as possible and with your needs in mind to safeguard you and your budget from any future hidden costs.
At A Class Building and Construction, we are committed to making the home building process as simple as possible and giving you a positive experience as you discover your new dream home. Contact us today to talk with builders that are friendly, professional, and experienced with all the requirements of knockdown rebuild projects.