The saying about renovations is true – take your budget and timeline and double it, because that is exactly how much it will cost and how long it will take. It’s not that someone might not plan properly or not know what they are doing (although both can be a problem) but has more to do with the unknown. Renovating a property as opposed to building a brand new one may seem like a cheaper option upfront but as you get into it you realize two things: 1) there are problems you will encounter that you could not have foreseen and 2) those unforeseen problems will cost you more money than you budgeted for and will mean you need more time to finish the work.
I have been brokering financing for builders and renovators for years. It never fails. The best laid plans can still be thrown astray when construction issues arise. In my experience, here are some of the common necessary evils that show up on many construction / renovation projects:
1. Trades – always held hostage by the trade that says they will show up on Monday but meant the Monday that was two weeks after the Monday you thought they were going to show up.
2. Inspections – those inspectors can be tricky. They will point things out that were simply missed or done incorrectly and need to be fixed.
3. Disasters – think pipes bursting or roofs collapsing. I can’t even count the number of unforeseen disasters that came out of nowhere to knock a project off budget and timeline.
All of the above can be dealt with and someone who is experienced is able to keep their cool when the inevitable occurs but it is highly unlikely that you will never have to wrestle with some unforeseen problem in the course of construction or renovation. These delays and issues not only cost money but interest is the real killer. For each month that goes by you will have to make another mortgage payment and pay interest that can quickly eat up equity.
“It is not certain that everything is uncertain.” ― Blaise Pascal
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