Backyard mansion taste on a granny flat budget
Ideally, you want to know how much your granny flat will cost well before you start securing bids. Unfortunately, the remodeling industry in general lacks transparency. For far too many homeowners, the true costs for their project only become clear when you’re already part way through the project — or worse — at the end of it.
BUDGETING FOR YOUR GRANNY FLAT PROPERLY INVOLVES BUDGETING REALISTICALLY.
BUDGETING REALISTICALLY MEANS THINKING OF YOUR GRANNY FLAT BUDGET LIKE THIS SIMPLE EQUATION:
GRANNY FLAT BUDGET = SOFT COSTS + HARD COSTS + CONTINGENCY
Soft costs are those costs associated with non-physical expenses such as architectural and engineering fees, as well as permitting. And like we’ve talked about before, permitting is very important.
Hard costs are costs associated with actual construction like materials for plumbing, framing, or trim, as well as labor costs for completing those projects. A contingency is a predetermined amount or percentage of your budget allocated for necessary, unpredictable expenses such as an undetected water leak.
HERE ARE SOME BALLPARK RANGES FOR WHAT SOFT COSTS SHOULD BE AS A PERCENTAGE OF YOUR TOTAL CONSTRUCTION COSTS:
Architect and/or Designer: 10-15 percent
Consultants: 6-8 percent
- Title 24
Permits and Entitlements: 4-6 percent
- Planning / Zoning
- Building & Safety
- Public Works
Total: 20-29 percent of your construction budget.
If you feel like you’re at risk of a ballooning budget, take these four steps:
Factor in contingencies.
Start with a bare minimum of what must be done and what you cannot live without (i.e. your “must-haves”), then prioritize them. If there is budget left over, add in some of your “nice-to-have” items in order of priority. Be mindful and don’t let yourself get caught up in the romance of building your very own granny flat! Like I’ve said before, you do not get champagne results on a beer budget.
Prioritize your wish list
Things may not go according to plan. So, plan for a few additional weeks of labor and a 10-15 percent reserve to handle unforeseen circumstances, like an undetected water leak.
Stop yourself from saying red-flag phrases.
You shouldn’t be saying things like “While we’re at it…” and “Since they have to be up there anyway…” opening the door to adding work — and therefore time and expense — to a project. So, zip it!
Assuming you don’t have unlimited funds and don’t want to end up with a half-finished remodel or under a mountain of debt, it’s crucial to be realistic and tactical about what you can afford from the start.