15 Feb 2023 | Edukatips

How to Calculate Home Renovation Costs to Avoid Budget Overrun!

Making a home renovation cost plan should ideally be the first step for anyone planning to rebuild their dream home. The reasons for such renovation may vary, such as rejuvenating buildings, adding new rooms, or expanding the building area. According to the needs, the bill of quantity for a renovation needs to be adjusted to financial capabilities.

Estimating the Cost of Home Renovation

Then, how do you calculate the cost of home renovation? What factors need to be taken into account? Things to consider in the Bill of Quantity (BoQ) are as follows:

Labor Costs

The first thing to take into account in the BoQ for the home renovation is labor costs. The payment system is generally divided into several ways, namely daily payment, piece-rate payment, or full piecework payment.

1. Daily Labor System

As an illustration, the cost of daily labor starts from Rp125,000 – Rp150,000/day. Usually, these costs only calculate wages for labor services, not including funds for building material purchases. If the renovation takes up to one year (365 days), then the calculation is to take the upper limit of the daily labor cost of Rp150,000 x 365 = Rp54,750,000.

2. Piece-rate System

The estimated cost for the piece-rate system is Rp600,000 – Rp800,000/m2. The funds needed for a renovation with this system tend to be greater. However, if the renovation exceeds the timeline, no additional costs incurred. The calculation of the piece-rate system is determined based on the size of the building you wish to renovate. As an illustration, for a building area of 100 m2 with the upper limit of the estimated prize, the cost of home renovation is 100 m2 x Rp800,000 = Rp80,000,000.

3. Full Piecework System

A full piecework system means that the cost of the home renovation includes labor wages and the cost of purchasing materials. Even so, the cost will depend on the specifications and quality of the materials used. The estimated average price of a full piecework system starts from Rp4,000,000 – Rp8,000,000/m2. Price estimates can also vary according to the needs of the renovation project, such as single-story or multi-story buildings.

As an illustration, the full piecework system with a building area of 70 m2 with a lower limit of the estimated full piecework price of Rp4,000,000, then 70 m2 x Rp4,000,000 = Rp280,000,000

Land and Building Costs

How to estimate the cost of home renovation for land expansion? This calculation includes the prevailing land selling price in the location around the residence. For example, renovating a house with a land expansion of 50 m2 with a land selling price of Rp2,500,000/m2. The additional cost required is 50 m2 x Rp2,500,000 = Rp125,000,000. These costs need to be included in the Bill of Quantity for home renovation.

Unexpected Costs

In making the BoQ, you also need to prepare additional funds for unexpected needs. The amount is about 10% of the total estimated expenses. If the estimated cost of home renovation is Rp280,000,000, other costs that need to be added are Rp28,000,000. Total expenses will be Rp280,000,000 + Rp28,000,000 = Rp308,000,000.

We hope the estimated cost of home renovation illustrated above can inspire you. If you need a loan to rebuild your dream home, BCA KPR Home Renovation can be your answer. Apply for KPR for home renovation online now and get relatively low and stable interest rates. For full information, click the button below: