It is the age old question.  After talking to clients about adding more bedrooms, bathrooms and what color the cabinets should be, the conversation always rolls around to the dreaded word: BUDGET.  If words went to grade school, BUDGET would be the word that stands on the corner of the playground by himself while DESIGN, FLOOR PLAN and QUALITY are playing kickball.  Nobody wants to hang out with him, but he always seems to show up at the party right when the fun starts happening, and makes everyone decide to go home.  Poor BUDGET.  

The good news is, BUDGET doesn’t have to be avoided.  You don’t have to pick him last for the team.  (alright, I think I’ve overused my metaphor so I’ll stop now)  If budget is included in the conversation early, honestly and often, it can lead to a much more successful project.

So in that spirit, let me attempt to shed some light on that subject for one particular type of project: the large remodel or addition.

A few disclaimers:  First, everything I say here will be a dramatic oversimplification of a complex and fluid issue.  So, please hold these numbers lightly.  Second, forget about resale value.  In most cases, the larger and more extensive the project, the less likely a quick return on investment will be.  (Over time that changes dramatically, but that is a story for a different day).   Third, a major influencer of budget is the size of the contractor.  Smaller is usually cheaper, but also more risky.  Bigger is more expensive, but also usually safer.

When I talk project budget, I have two techniques I use.  The first is one most people are familiar with, and that is cost per square foot.  My basic ranges are based on what type of space is being touched.

• The least expensive is basement finish.  This is because no foundation, structural or roofing work is usually needed.

Range: $40 – $80 per square foot and up.

• The next least expensive is attic finish.  This is because although there is no foundation work, some exterior and roofing work is usually needed.

Range: $80 – $120 per square foot.

• The most expensive is addition that is expanding the footprint of the house.  This is probably obvious, but it requires foundation, exterior/structural and roofing.

Range: $125 – $200 per square foot.

With this method, size matters.  The smaller the project, usually the higher the cost per square foot, especially for additions that expand outward.

My second method is what I call the “bubble method”.  This method sees each group of areas in a house as a “bubble”.  For example kitchen/dining is a bubble; laundry/mud a bubble; living/entry; master suite; etc.  We just add up the cost ranges of the various “bubbles” of space that are impacted.

• Kitchen/dining $30,000 – 80,000
• Laundry/mud $10,000-30,000
• Living/entry $10,000-30,000
• Master suite $25,000-60,000
• Other bathrooms $8,000-20,000 each

Add up the bubbles that are impacted, sprinkling on some extra here and there, and you will start getting a sense of what will be required.

Whew.  I think I may be fired from the Contractor’s Pricing Secrecy Club tomorrow, but I think it is time for BUDGET to be invited to the party.  It may not be a very good dancer, but it makes that really good salsa dip.  (What?  I don’t even know what I mean with my metaphor anymore!)

Bottom line:  Don’t hold too closely to the numbers above, but they are at least a way to start a conversation.  And please, talk numbers early, honestly, and often when you are planning for a big project.