How do you budget for a renovation?

Perit Matthew James MerciecaArchitect & Civil Engineer

Building & DesignReviewed: 7 October 2026

The short answer

Instead of asking whether a budget is realistic, ask how much contingency it needs for what you know. An early rule-of-thumb estimate from market rates per square metre needs a large contingency; a cost-by-trade estimate, once the brief and design are set, needs less; and detailed contract documents that let contractors quote like for like bring it down again.

“Realistic” is the wrong question

Asked how to set a realistic renovation budget, Perit Matthew James Mercieca from MJM|DA reframes it: "Rather than realistic, I would use the term: what is the contingency, based on the amount of information I have about my estimate?" A budget is only as reliable as what is known about the project — so the contingency should shrink as the project gets defined.

Stage one: the rule of thumb

Early on, the estimate is a rough one, and it "is going to have an automatic large contingency and possible variation, because we do not know enough about that particular conversion project." This is also the stage where "one becomes very tempted to quote rates per square metre as they exist in the market."

Stage two: an estimate by trade

As the brief is set out, the design is carried out and the elements of the conversion are defined, "we can have an estimate of cost by trade. That estimate of cost is a cost management tool that will help one plan with a lesser contingency than a rule-of-thumb cost."

Stage three: like-for-like quotations

With the details and the contract documentation done, the project moves into procurement and quotations, "and once again that contingency is going to reduce, especially if the contract documentation is going to provide like-for-like quotations."

Why one quote says €100 and the next €200

That last step is what ends a familiar surprise — two quotes for the same job, one double the other. "How can it be? Of course it can be. If you are not asking the same question, do not expect the same answer in return from contractors." The contract documents are the question. It's also why, at a viewing, Matthew asks where the contract documentation is.

If a grant is part of the plan

A grant may not cover every part of the works — grants often split structural and finishing works — and starting before it's approved can cost you it altogether. See what to do before renovating if you want a grant.

Sources

Perit Matthew James Mercieca — Yitaku Asks video (Architect Series, Cluster 4: contingency follows information — rule-of-thumb estimate, cost by trade, like-for-like quotations from contract documentation)