Quick Budgeting - Old Houses Malta

Quick Budgeting

By Old Houses Malta | The Renovation

So, you are deciding if you should buy a house but you know that after you buy the house you will need to fix it. Of course, you have a budget however, you are unsure if the house you are about to buy can be fixed within this budget. Before you commit yourself you need to get a general idea of how much the project will cost. Unfortunately, in this case you don’t always have the luxury of enough time to get quotes from several workers as more often then not you will end up losing the deal.

I would like to share the technique I use to estimate several projects. This method will help you establish how to estimate your project’s costings ahead of time. Then you can refine this estimate during the project. Like this, you will have enough time to react accordingly.

Let’s Get into It

The first secret is to disassociate yourself from the project. It is in human nature to be optimistic about your own budgets, you always think that everything will go to plan. So here is the trick… close your eyes.. imagine you meet a friend, let’s call your friend Bob. It so happens that Bob is about to buy a house which is identical to yours and has your same plans to fix it.

Next, come up with a rough idea of how much Bob’s (in reality it’s yours 😉 ) dream home will cost. Start by listing a list of things that need to be done, and for each one, estimate the amount you will be spending. When doing this you usually make two assumptions, which are usually wrong:

  1. You assume that your estimates are correct.
  2. You also assume that your list is complete which is rarely the case i.e. you probably forgot to list all items

In order to mitigate these risks, I would add another item to your list: contingency. To begin with, you can assume that the contingency is at least 30% – 50% of your estimated price.

Under vs Over-Estimating

If I had a choice, I would prefer that my budget projections are correct, not 1 cent more not 1 cent less. However, in general, I prefer to overestimate rather than underestimate. If you are short of budget your project will come to a premature halt. On the other hand, if you overestimated you are going to be left with some extra cash. Trust me, there is always more work you can do.  So extra cash will hurt neither Bob nor you.

If you are still in buying stage remember that you will need a sum of money to fix the house. Depending on the size and state. It’s very likely that you will need to change all the bathrooms and kitchen so take that into consideration when buying a house. Always add contingency.

At this stage, I would say that it is important that you include everything. You probably do not need all 3 bathrooms in your first year. However, at this stage, it’s best to include them in your high-level budget plans. Like this, you will get a clear idea of how much your project will cost and if its worth the investment.


In order to help you mitigate the 2nd wrong assumption: “You also assume that your list is complete” we’d like you to consider the below list to help you find out if you missed anything from Bob’s plan:

  • The house price
  • Legal fees which include: tax, notary fees, bank fees
  • House restructuring: fixing of roof, opening of any doors, taking down walls, changing of beams, well work
  • Demolishing of items such as removing existing bathrooms and kitchen
  • Electricity and plumbing
  • Wall treatments: this includes plastering or gypsum over the walls and paint
  • Flooring: removing of existing floor and placing in new flooring
  • Apertures: installing new apertures or refurbishing existing ones
  • Fixed furniture: bathrooms, kitchens
  • Façade refurbishment including the wooden doors and balcony
  • Appliances including kitchen appliances, tv, sofa, bedroom
  • Soft furnishings: curtains, light fittings, carpets
  • Contingency – yep you still need this. Things might go wrong and Bob will need some extra cash when he is at his weakest.


Use this just for planning purposes. Take these prices with a pinch of salt, it really depends on what you go for. For example, if you decide to tile your bathroom with high-end marble you’ll end up spending much more than the 2500 estimate given below. However just to give you a high-level indication:

  • Tiling: 10 – 15 euros per meter.
  • Kitchen: 10,000 – 15,000, appliances 3000 – 6000 depending on what you go for, top: 3000 – 6000 – you can start out with a cheap wooden one for 50 EUR
  • Bathroom: 1500 – 2500 each
  • Movers: 200 – 400
  • Airconditioners: 800 – 1500 each
  • Doors: 300 – 900 each
  • TV: 900 – 1500 for a 49” smart TV

Got any others? Please let us know in the comment section below and we’ll include them in the list

I don’t have enough money for the house I need

You came up with a list, but soon after Bob goes into a fit. Bob doesn’t have enough money to finish the house.

The first thing that one should consider is the idea of partnering up with someone. Whether that is your wife/ husband or girlfriend/ boyfriend. Buying a house could and should be seen as a business opportunity. Of course, if you buy the house on your own you are free to buy whatever you like. Otherwise, it’s probably worth renting out rather than buying. Needless to say that if Bob isn’t in a stable relationship you shouldn’t suggest that he buys the house with his partner.

Start by checking with your bank what is the maximum amount of loan you can get. You can go online for your bank’s loan calculator (BOV, HSBC) which usually gives you a clear indication.

Finding good deals

In the property industry, pricing is very subjective. People value things differently depending on their own taste. Some think that their house costs millions while others think that the same house costs thousands. You don’t pay how much the house is worth but how much the owners think it costs.

Consider what had to happen if movies were priced differently. You would probably think that the cheap movies are not worth watching. So cinemas charge a fixed price on all movies whether it is a cheap Bollywood movie or a high-end Hollywood movie. This couldn’t be said for the house market, anyone can decide a selling price subject to their liking.

We suggest you find an unconverted house which can be fixed with some repairs. Don’t get discouraged by work that needs to be done. Just do your research before buying the house, add contingency to your plan and go for it. You can get very good deals on houses that need repairs.

Closing Thoughts

At the very least I hope that this article helped you strengthen your relationship with Bob. If you found this helpful please register to our mailing list so that you get more tips like this in your inbox. If you have any other suggestions let us know by leaving a comment in the comment section below.

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