Tips, Types, and Calculation of Home Renovation Costs [New]

Renovating a house is not an easy thing. Indeed, for some people, preparing for home renovation costs is not included in the primary and urgent needs in their financial planning. But, who doesn't want to see their house look beautiful again? It takes a lot of time to save money in preparing a home renovation fund.

In calculating the cost of home renovation, of course, it does not escape the cost of labor and material costs. The size of the cost really depends on how much you remodel the house. In this article, the BFI Finance team will provide tips on how to plan optimally for home renovations, including discussing the calculation of the required costs. Check out the following review, yes!

Types of Home Renovation Costs

To make it easier for you to estimate the cost of home renovations, make a neat Budget Plan (RAB) which includes repair items and costs needed. You can consult with a contractor or handyman who is more experienced in order to get optimal planning.

1. Material Cost

Generally, to get material of standard quality, you need to prepare a budget of IDR 3,000,000 per square meter. Meanwhile, for premium quality materials, you need to spend more than IDR 4,000,000 per square meter. Material prices also depend on the conditions of each region.

2. Construction Service Fee

There are three payment methods for handyman services, namely daily payments, wholesale and full wholesale.

Daily fees are usually charged from IDR 120,000 to IDR 150,000 per day. These costs do not include the cost of materials needed. Meals are usually included in the cost.

Meanwhile, for bulk payments, the price is usually set at IDR 1,000,000 to IDR 1,500,000 per square meter. This system is calculated based on the area of the building, not the duration of the process. So, if the renovation process is hindered by rain problems that cause the work timeline to be delayed, you will not be charged additional fees for it. Payment with this system does not include material costs.

Meanwhile, the full piece-rate payment system is a payment system that includes the cost of construction services and materials needed. So, you don't have to bother recalculating the material costs, because everything is entrusted to experienced builders or contractors. Generally, you will need to prepare a fee of IDR 2,000,000 to IDR 4,000,000 per square meter if you decide to use the full piece payment. The more expensive the material, of course, it will affect the cost per square meter.

3. Cost of House Land Expansion

If you decide to renovate your house by adding land, you must also take into account the cost of buying the land. The selling price of land in big and small cities is different. Generally, the selling price of land in big cities will be higher than in small cities. For example, the price of land per square meter in the Cahaya Alam area, Bekasi is set at a starting price of IDR 1,400,000. If you are going to renovate a land area of 30 m2, then the cost to be incurred is Rp. 1,400,000 x 30 = Rp. 42,000,000.

4. Other Fees

In addition to the three main cost components above, it's a good idea to prepare backup costs to anticipate unexpected costs that arise. For example, if the price of materials increases or requires additional equipment for other home designs. For this reserve expense item, allocate at least 10% of the total home renovation costs.

Home Renovation Cost Calculation Formula

You can refer to the following simple calculation formula for home renovation costs:

Total cost= (Land Area to be Renovated x (Worker Cost + Material Cost)) + Other Costs

Total cost= Land Area to be Renovated + Full Wholesale Cost of Renovation of the House

Example calculation:

You want to renovate a house with a land area to be renovated of 36 m2. You decide to use the full wholesale system at a cost of IDR 3,000,000/m2. Reserve costs are allocated 10% of the total cost of house renovation. Then the cost calculation:

Total cost= (36 m2 x IDR 3,000,000) + (10% x (36 m2 x IDR 3,000,000)

= (Rp 108,000,000) + (Rp 10,800,000)

= 118,000,000

So, with 36 m2 of land to be renovated, you have to prepare funds of Rp. 118,000,000.

Careful Tips in Renovating Homes

1. Adjust to the Needs and Building Area

Efforts to renovate a house must be adjusted to your needs and financial conditions. For example, you feel the need to renovate the master bedroom with an area of 9 m2, so focus on those expenses only. Or, if you decide to remodel an entire corner of the house, you have to determine whether it needs to be completely remodeled from scratch or just need to reorganize the room and add a little space.

2. Make an Optimal Design

Before you decide to execute a home renovation, make a careful plan that includes design and costs. Regarding design, you can consult with more experienced parties such as architects and interior designers. You can also get home design references via Youtube, Pinterest, Google, and others. Furthermore, with the help of a handyman or contractor, you can compile the most optimal RAB.

3. Selling Home Furniture that is Not Used

On several occasions, home furniture in the current period will reduce its useful life or feel that it is no longer suitable with the theme of the house after being renovated. It's good that you can sell the furniture and the income from the sale can be used as funds to finance home renovations.

4. Prepare Budget Carefully

The cost of renovating a house requires a lot of money, so try to have the funds that have been collected for a long time. In-depth research on the cost of builders, architectural services, and the equipment needed to renovate a house is something that needs to be prioritized.

5. Consider Submitting Home Renovation Financing

In preparing a home renovation fund, you can use savings funds or loan funds. If you use savings funds, make sure that these funds have been prepared in the long term and do not interfere with your other expense items. Another alternative is that you can apply for loan funds to finance home renovations through financing companies or other financial institutions. Through a financing company such as BFI Finance, you can apply for a home renovation loan with a BPKB Motor or Car guarantee. The interest charged every month is also relatively low, starting at 0.95% flat per month. If your financing application requirements are complete, we will try to make sure that your loan funds will be disbursed within 1 day for the BPKB Motor guarantee and 2 days for the Car BPKB guarantee. You can apply online via the following form.

Those are some things that can be considered in renovating a house. Because it requires a small amount of expenditure, you need to be careful in determining the cost of home renovations. I hope you get inspiration through this article, BFI friends. If you need funds to renovate a house, don't hesitate to entrust it to BFI Finance. And until February 28, 2022, you have the opportunity to get cashback of up to IDR 1,000,000 for every financing application through BFI Finance's exclusive partner! You can read more details via the following link.