Calculating refurb costs by the square metre method

Calculating refurb costs by the square metre method is a common thing that inexperienced develops do

Many people think they can calculate the cost of a refurbishment project by the square metre method

But this is not an accurate way to calculate refurbishment costs

It is a very amateur way to do it

What is wrong with it?

At best it will only give you a rough estimate of the actual cost

At worst it will give you an unrealistic figure and lead to you running out of money before completion

If your figures are too low you might be tempted to look for a cheap builder

But using cheap labour is a false economy

You cannot guess at figures when planning a refurbishment

You need your projected costs to be as accurate as possible

Nothing should be arbitrary

What is the square metre method?

Put simply it’s when people try and guess the cost by the amount of square metres of the property

They may be building an extension and allow for £1500 per square metre

So if its 30 square metres they will allow 45K

But that doesn’t mean anything

They need to find out the price of materials and the cost of labour

It may be the case that it actually comes to 70K

So they will  have to find more money to complete the project. If they can’t they run the risk of the builder walking off and leaving them with an unfinished extension. Or halfway through they will have to drop the spec and not end up with what they wanted

Other people may have 50K to renovate a house that is 100 square metres. Therefore they will allow £500 per square metre

But it doesn’t matter what they allowed if the actual price comes to more then that. It costs what it costs regardless of what they allowed for it

On the other hand they may spend £500 a square metre when it should have cost £350 a square metre

What is the correct way?

The correct way to do it is to first get a design then decide what spec you want

Then get some quotes for the labour and the price of the materials

If it turns out you cant afford it you need to lower the spec

Careful procurement of materials and efficient project management will lower the final cost

As long as you complete your project within your budget it is irrelevant what the final cost is per square metre

Will similar projects cost the same?

2 identical projects will end up at different final costs

That will be down to how efficient the procurement processes were and the skill and efficiency of the workers doing the job

Labour rates can differ significantly in different geographical areas and at different times of year

The same is true of material prices

So it is pointless asking someone how much their project cost per square metre if they did it last year. Your costs to do an identical project this year could be far higher


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