How do I set a realistic budget for my construction project?

Most renovation or new building project budgets are determined by the way you approach your project. Your approach to the project may fall into any one of the following:

Investment Project Approach

This approach to determine your project budget is concerned with maximizing the rental return of an investment property. It may also be concerned with achieving long term capital growth, and ongoing running and maintenance costs.

Development Project Approach

This approach to determine your project budget is concerned with the resale of your project after completion. The design brief is formulated and costed to achieve this profit.

Affordability Approach

This approach to determine your project budget is concerned with making the best use of funds available. This generally requires a building design that achieves excellent value for money.

Staging Approach

This approach to determine your project budget relates to a situation when there are not enough funds available in one lump sum to meet the cost of construction of the desired building design, but may be available in two or more installments. As a result, the design brief for this approach is concerned with creating a master plan design that allows construction to be completed in stages.

No Budget Approach

This approach is when the project budget is determined from the outcomes of the design brief and the architect’s design itself. This does not mean that the budget is limitless, but rather implies that priority is given to style, features, and finishes over cost.

See also: What affects my construction budget?