Archive for the ‘Remodeling Costs’ Category
Well it appears that 2012 is going to be the start of a comeback in the remodeling industry here in Portland, Oregon. After several years of less than stellar projects in terms of both available investment and number of projects completed, I think that the “pent-up demand” we’ve been hearing about is finally bursting at the seams. All of my contractor and vendor friends (me as well) seem to be bustling around and happy again. It’s very exciting!
Speaking of budgeting, one of the questions I get asked most often is, “How much do you think this will cost?” I am responsible for bidding out the design portion of any project but it’s the contractor that determines the final cost of the overall project. So I avoid answering this question like the plague when asked. Sure I have my gut feeling of an approximation, but have learned the hard way that by mentioning any numbers at all it settles in clients minds as the expectation. SO, instead I want to offer up a wonderful tool that, in my experience, is a pretty good predictor of remodeling costs.
The “Cost vs. Value Report” created annually by Remodeling Magazine is used by many folks I know to help clients understand that while $20K really IS a lot of money, it will get you nowhere if you want to gut and completely re-do your kitchen and master bathroom. I know that I’ve mentioned this before in past blogs as a great resource, but now that the 2012 report is available I decided to do a little analysis looking back at where the cost of projects has been in Portland for the past five years. What I found actually surprised me. My hypothesis was the costs may have come down with the downturn in the economy along with the common practice of clients interviewing many multiples of contractors before hiring one. I thought that perhaps that competition would drive overall prices lower. That was actually not the case. Take a look at these figures specific to the Portland, Oregon area:
(All figures taken from Remodeling Magazine’s Cost vs. Value Reports 2008-2012)
Now… before you say to yourself, “SWEET! I know what to expect now!”, I’d say back to you, “Whoa, Nellie!” because there are very specific factors that play in to these costs.
Let’s look at an example of some clients I worked with recently:
My clients live in one of those wonderful older homes in Portland (circa 1926) with lots of great architectural details but very outdated and out-of-code building materials. They wanted to remodel their master bathroom from top to bottom and use all new plumbing fixtures, lighting, glass subway tiles, frameless glass shower doors, etc. So we looked at this reports’ definition of a “Midrange Bathroom Remodel”. The definition is as follows:
- Update an existing 5-by-7-foot bathroom
- Replace all fixtures to include 30-by-60-inch porcelain-on-steel tub with 4-by-4-inch ceramic tile surround
- New single-lever temperature and pressure-balanced shower control
- Standard white toilet
- Solid-surface vanity counter with integral sink
- Recessed medicine cabinet with light
- Ceramic tile floor
- Vinyl wallpaper
But in the instance of my clients, they wanted/needed upgrades that would definitely increase the cost, such as:
- All of the wiring in the walls needed to be replaced and brought up to code
- All of the plumbing in the walls needed to be replaced and brought up to code
- All of the lath and plaster walls (and ceiling) needed to be replaced with waterproof drywall. Removing lath and plaster requires more labor and is most likely covered in lead paint, which presents a whole new added level of labor to meet federal regulations for it’s proper disposal
- They wanted the entire shower interior done in glass tile (rather than white ceramic tile in the description above)
- Frameless glass shower doors can run in upwards of $2,500 (no shower door is even included in the description above)
- They also wanted to replace the vanity AND add more customized storage to the room (a new vanity is not part of the description above)
- The fee for a bath designer is not mentioned above and can run on average about 10% of the total job cost.
So when my clients asked me what I thought about the price of the project, the Cost vs. Value Report told us it would be, on average, $17,400. Their budget was $20,000, causing me to say that most likely they’d need to a) increase their budget significantly or b) make some significant concessions on the cost of materials and fixtures they want to use.
The jury is still out as to whether or not they’ll go forward, but I think this makes a great case study in how “guesstimating” the cost of a bathroom remodel can be tricky.
Nearly all of my clients are newbies when it comes to working with an interior designer, so there are several things I usually explain at my initial meeting. One of the most important items we discuss is how I charge for my services.
There are many ways to charge for design work including (but not limited to):
- Charging by the hour
- Charging by the square foot
- Charging an hourly rate plus a mark up on any products sold
- Charging by the job
- Charging a percentage of the overall budget
An industry study was done in 2009 by the American Society of Interior Designers (ASID) to better understand how designers charged versus how consumers liked to be charged. The results were very interesting. They found that almost 70% of consumers prefer designers to charge a fixed or flat fee, while only 5.6% of designers actually charged for their work that way. Most designers charged an hourly fee or some variation of it.
Having charged by the hour for the first seven or so years in business I understand why designers do it. Mainly, if clients drag out the process by being high maintenance, or are ineffectual at making timely decisions, or used me as a marriage referee, at least then my time would be covered. However, I found that the process had more downside than up because:
- My clients never knew how much they would ultimately spend for my services and I couldn’t tell them ahead of time how many hours it would take.
- Receiving an itemized list of every single thing I’d done nearly always caused frustration and questions from my clients’ perspective. Sincerely, nobody likes to see that they have to pay for all of the phone calls I made or all of emails that I had to send during the process. It’s no different than when you get a bill from your lawyer for $250 to pay him for licking a stamp on your behalf… am I right?
- Clients have no idea how long the creative process can take and if they saw that I’d spent say three hours building a computer model of their new kitchen they tended to question me because in their minds it “should’ve only taken half an hour”.
So after working this way for seven years I decided (in 2009) to move towards a flat-fee pay structure. This method is truly only successful if you’ve had a number of years experience under your belt and I have found it to be so much more beneficial for my clients.
I have developed an in-depth spreadsheet that I use once I understand the scope of the project, which helps me calculate a typical flat fee for the scope of work. I put it into a contract for my clients to review and sign before I do any work. It is important to understand (and I explain this clearly each time) that my flat fee does not constitute an “all you can eat buffet” situation. There are a fixed number of hours built into the fee and if we bump up against that number before the process is through, then we discuss putting a change order in place to cover the difference. I very rarely have to do this and in instances where it has become necessary it’s because the scope of work grew beyond what was initially agreed upon.
So if you’re on the hunt for an interior designer, be sure to ask about their fee structure so that you can make apples-to-apples comparisons before making your final decision!