speaker-0: Now let's talk about budget. And I don't mean just like the size of your budget, but your strategic allocation of your budget, how you're deploying your dollars to, you know, achieve everything you're trying to accomplish within the renovation.

speaker-1: Yeah, 'cause it's not necessarily about the size of the budget. It's about how you allocate those funds.

speaker-0: Welcome to Return on Design, the podcast where beauty meets strategy and interiors become assets that perform. I'm your host, Rachel Niederhofer, designer, investor, and builder of high-impact spaces that deliver real results. Alongside my husband, I run both a design firm and a real estate investment company, where I live at the intersection of creativity and ROI every day. Each week, I'll be unpacking what most people overlook. How strategic design decisions can grow your investment, elevate your lifestyle, and unlock the full potential of your property. You'll get real tools, proven strategies, and unfiltered conversations with industry experts who are doing it right. So if you're ready to invest with purpose and leverage design as a powerful tool, this podcast is from you. Welcome back to Return on Design. I am your host, Rachel, and I am joined today with my co-host and amazing husband. Today we're going to be sharing with you the five things that you need to focus on when it comes to renovation execution. These things are what can make or break the success of your project.

speaker-1: Justin need her offer. Is the the success of your project that's not one at the tile store or at the home store home goods store. It's one by making sure you allocate your decision making properly in the right locations. And that's what we're gonna talk about today.

speaker-0: First one, let's highlight is function. What is the layout and the form of the space? And when you identify function, it's going to help you actually establish a design plan of what you want to do when it comes to the renovation.

speaker-1: Yeah, things like are we, you know, removing or adding any walls? Are we ⁓ widening openings? You know, what is the kitchen layout gonna look like? Things like that. And do we have the proper a space?

speaker-0: Yes. So form, function, traffic flow, like, you know, how a space is actually lived in and experience really matters. That is, you know, a huge thing that can easily be overlooked. If we're only obsessing about finished selections and the final aesthetic and we're glossing over the true livability aspect, you know, you're

speaker-1: Yeah, you wind up putting a band-aid over a problem, you know, as we've talked about before, not addressing what the root of the problem is and why you wanna maybe update some things if you're a homeowner or how somebody's gonna actually live in the space if you're an investor.

speaker-0: That's how, you know, people end up calling us two years after they did a major renovation because they went ahead and executed plans without any real strategy behind their design. So function, function of the space. Another important piece that you need to evaluate is scope of.

speaker-1: Exactly. scope of work. You know, your your definition of are we like are we refreshing or are we renov or are we completely remodeling? Are we going to sell it or are we gonna hold this?

speaker-0: Yes. So dialing in on the scope all the way to a T. So once you've established, you know, your plan, well, now we actually need to scope that out so that it's clearly communicated to everybody. Itemizing the scope, making sure you've really identified what changes will be made, what won't, and the priority of each change. Without a scope, I mean you're putting yourself in a risk prone position to overspend really easily because you haven't fully identified initially. what the work is and now it's like, ⁓ yeah, well go ahead and just add that too. Or you know what, I didn't think about this. Can you go ahead and just look at this too? And it just starts to creep, creep. Your scope work as it creeps, that turns into but

speaker-1: Budget. Budget inflations, sometimes added stress of one more thing and then ⁓ wait, budget's going even higher than I thought, you know. Yeah.

speaker-0: And it also leads leaves you susceptible to make decisions impulsively without ever identifying like what is the cause and effect. And that sounds so simple, like, well yeah, that's obvious. But it's it happens all the time. I mean, we had a client who did a renovation and they, you know, gutted the whole bathroom, they started executing the new design and then there was this huge void. in the corner and they didn't know what to do with it. So on the fly they ended up making a very un

speaker-1: One was unattractive it was unattractive and it was un really unusable.

speaker-0: Yeah. And that happens all the time. Cause when you're you're constantly changing your scope on the fly, you know, ⁓ well we didn't think about this corner in here. What do you want this corner to be in there? Like, I don't know. What do you think it should be? ⁓ let's just turn it into a closet.

speaker-1: And and you're planning so that you can execute your decisions need to be proactive rather than reactive. Yes. There's always a little bit of reactive decision making because if you when you find something that was truly unexpected, okay, now how do we pivot? But if you've planned it properly, you should have a pretty good idea of where you're gonna turn and how you can make the adjustment.

speaker-0: Let's move in. So we've already talked about function, flow. You know, you you've got to make sure you're evaluating that. We've talked about really defining the scope of work, making sure you have a plan to follow and communicate. Now let's talk about budget. And I don't mean just like the size of your budget, but your strategic allocation of your budget, how you're deploying your dollars to, you know, achieve everything you're trying to accomplish. Within the renovation.

speaker-1: Yeah, because it's not necessarily about the size of the budget. It's about how you allocate those funds. Where you're spending the money. Because if I've just got a budget of say fifty thousand dollars, well, just because I did fifty thousand dollars worth of work to this property doesn't mean I gained fifty thousand dollars in value. Yeah, if I spend if I allocate correctly, that fifty thousand could be fifty or it could be seventy-five thousand dollars in value.

speaker-0: And we see we see this misaligned expectation all the time in the real estate space because, you know, people did do exactly what you're saying, like, ⁓ we fixed up our house or we, you know, put in a new bathroom or or whatever. They've invested something into their property. And to them that equates as like, we spent fifty thousand dollars on this project. And it doesn't always translate to a value add from a buyer. You know, when you go to actually resell the property. And so people want more ⁓ money than a buyer's willing to pay. And it it's a classic example of like you're just throwing money into into it, throwing money at the wall, and you there's no strategy. So how are you actually measuring the return of your investment?

speaker-1: So let's let's talk about what are the high value or high impact places where you may want to really strategically allocate more more of your funds, you know, like layout corrections, kitchens, ⁓ the function of kitchens or bathroom layouts, you know, lighting.

speaker-0: High use, highly livable sections are important. Yeah. But if if you're making, you know, a lot of decisions apart from that function aspect of like livability, you're you're putting yourself at risk for allocating funds to something maybe that you really like that isn't really value add to the asset. So that, you know, if you do position yourself to sell like other people, it may not make sense. Like, ⁓ you did this, you know, outstanding wallpaper in this room and it's not really my color or my taste or or whatever. And you overspent on your fund allocation here because you loved the aesthetic of it. And it doesn't really add a lot of value from an asset perspective. Versus to your point, those high impact areas like your kitchen, you know, how how people are actually functioning in the space, who Who it's designed for or your bathroom? Do you have adequate storage that people are gonna want? You know, is there a his and hers sink? All of those things are what ultimately move the needle from a valuation perspective and okay.

speaker-1: But then there's also the areas where it kind of has a little bit more of a lower end or lower return value. And this is where sometimes a lot of people can really overspend in the budget by not truly paying attention to what you're adding. And is it going to r give me that return on my design? Yeah. You know, like things like custom mill work. While it's gorgeous, it's you know, it can be beautiful and when done right, adds a tremendous amount of value. But if you're putting it everywhere. Are you overspending and not getting the value back?

speaker-0: question. So make sure you're not ignoring the importance of exactly how your budget number or your yeah budget for your project is being deployed. And don't just turn it all over to a general contractor and say, run with it. You need to have a a plan of how how the money is going in and is that value going to be expected on the on the backside. Yeah. So that you're not redoing a renovation two years after you just did one. Okay, so let's go back to those like high impact areas and focus on infrastructure. So another big point of a renovation is, you know, it it's really closely aligned with flow and function in my opinion, but I'd love to hear your insight about infrastructure specifically around those high impact spaces.

speaker-1: ⁓ Yeah, I think the flow and function, like usability, like if a walkway seems too narrow, we've got to correct that so that it's actually usable. Otherwise, you're just creating a new pain point or you're just leaving leaving one checked. And it's going to matter to a potential buyer or renter or, you know, however you're choosing, or even if it's your own personal home, it's gonna matter to you in the end. It's still gonna create a pain point.

speaker-0: Yeah. We're actually dealing with the situation right now in a project we're doing where we've have custom cabinet fabrication and there's a ninety degree, you know, corner in the kitchen and we've been having conversations about the design and making sure that that infrastructure, if you will, is not going to cause a new problem. Like We have a drawer drawer function and making sure we have the proper clearance and like all these little details of evaluation are the strategy level that we're talking about of really making sure we're focused on these high impact areas that create real value and the livability aspect, you know, that functionality. We don't want to put this incredible custom kitchen together and then have mechanical problems when they're trying to actually live in the space.

speaker-1: Actually trying to use it. I mean nobody wants a set of drawers you can't open because it's hitting the next set. Because, you know, you didn't think or it wasn't it wasn't fully laid out to the best of its ability.

speaker-0: Yeah. Yeah. And on the same note, you know, there's another situation. I know I know people like to hear stories. So I'm trying to paint a picture for our listeners here, but in a bathroom, you know, yes, we're thinking about storage as should you be, but that it's high impact from a usability standpoint too. So you need to think about electrical. Like, do I have the right plugs in here for function? We have been recently correcting a bathroom for a project we're working and they had issues with the plugs. They had purchased the house, the plugs didn't make sense. They don't even know what they're used for. And so those are the type of high impact areas that you really want to focus on and make sure you are accounting for. And we're not just we're not just solely focused on aesthetics.

speaker-1: Yeah. Aesthetics are nice, but form and function will win you for life of a better term, more points in the end.

speaker-0: Well, let's just let's just hone in a little bit more on these high impact areas because this is where people get it wrong a lot. And honestly, a lot of these flaws in execution are because they didn't define it early on in the scope of work and really in the design. I mean, when you just start, you know, tearing down walls and trying to execute based off of a final image versus like a real plan, you know, you're missing out. on major infrastructure like HVAC location, like we've already pointed to electrical things that easily get glossed over. What are some more examples that you could think of? Like like you said, hallways, the width of hallways, wall alignments when you're looking at traffic flow, you don't want like we're doing a remodel and we've transformed an old utility closet into a pantry. And so we're realigning the traffic flow from the kitchen into the pantry. It's a wall alignment.

speaker-1: Yeah, we actually removed part of a wall so that it creates an open flow and concept and doesn't close off.

speaker-0: Yeah. But those are these are the type of infrastructure examples we're talking about. Like, you know, yes, we can we can create a plan on paper all day long and we should be, but then when we go into execute, you know, you need to be really paying attention to these details as well in your plan so that you're not getting that unexpected scope increase and overlooking some really important things that are gonna affect the design and the renovation. And last but not least, the order of operation.

speaker-1: This is big. Yes.

speaker-0: And how you're going about actually executing. So tell

speaker-1: When you when you start having to rework something that you've already done, you're compounding costs, you're compounding frustrations, you're compounding time. If you're laying down tile before you've moved a wall that you needed to move, well now you're looking at tearing out tile that you just paid for material, time and labor. Now the time to move the wall and then redo it all and still have to make sure it all lines up as it was supposed to originally.

speaker-0: Yeah. And making sure those trade participants are coming in on the right rhythm. Like let's talk about the relocation of a washer dryer that we recently did and the tradespeople that were involved and the process of execution. Like we couldn't call in this guy until this guy did what he would need.

speaker-1: Yeah, so with with that, we were moving the washer and dryer unit from the original utility room into what we're redesigning as a new area. Well, we had to first, before I can move them, I've got to get the plumbing over there. Okay. Well, the plumber gets in there and he's got to create his new drains and, you know, run the water lines. I've also got to get the electrician in there. Okay. I need to get those guys in because they actually have to open the wall up before I get my painter in there. Drywall. And my drywall guy.

speaker-0: You're just

speaker-1: 'Cause if I put the drywall up, well my plumber and my electrician are gonna go cut it up so that they can run what they need to do. And then I'm gonna pay my drywall guy again.

speaker-0: And too, for your baseboards and so the order of operations crucial.

speaker-1: It's very crucial. And you can, you know, you can move through areas and take it to a point where you know, hey, I've still got to touch this piece. But we're gonna hold up, we're not gonna get all of this laid up to here. We're gonna we're gonna hold back here, and that allows us to kind of get some things ready and then pivot to the next section so that we can tie everything in seamlessly.

speaker-0: Well, and that is that is a great talking point because that is real life, right? Like when people are living in the property that they're actually renovating, which is happens a lot, that is not ideal, but it's real life. So how do you coordinate that order of operations so that it is something that can actually be done? You can actually live in the space and remodel it at the same time or do it for a client.

speaker-1: Yeah, for me, I mean, it's it's kind of the way I think back to being in my corporate career of like structurally and the the order of what needs to happen and how you can move through a project or project area because what you do is you basically break the whole house down into multiple projects and you order out each project or each scope of each section of the project.

speaker-0: Yeah. And not even just the house into different scopes, but the actual

speaker-1: The different trades and and what needs to be do what needs to be done. And you know, I may have this the plumber in here this week doing this work and I'm gonna have him back in you know, two weeks to do this over here because I've gotta move strategically back and forth across.

speaker-0: Yeah. So just to give you a a an even greater image of what that looks like, we have worked on a project where we basically split the house in half and we did a full finish on one half and then allowed them to live in this half. So what wait, let me back up. So they had to move out of that half for us to execute that half. Then we fully executed that half. Now they're living in that half while we're executing the remainder. So that whole order of operations, how you're approaching it, how you're actually executing. So if you can get these five decisions right and really assess each renovation project with all of these things included, you're gonna have, you know, a better impact on your renovation execution. You're going to control your costs better and not have that regret, that execution regret of. ⁓ I did this and now I hate it or I didn't think of this and I need to fix it. And overall just better livability and better better valuation for that asset, that actual investment you're making, which in turn is a part of the return that you should be getting on the design.

speaker-1: Remember, like you don't have to renovate everything, but you need to prioritize and prioritize correctly because the success of your project is structural more than it is a step.

speaker-0: Okay, so if this episode has clarified for you what actually matters, what you really need to be considering, make sure you follow us. Make sure you are subscribed to our YouTube channel, connect with us on our website and our social platforms at Real Return on Design. And on our website, we actually have our blueprint that we've created. It's a return on design blueprint. And this helps position you to like accelerate this process to help diagnose. your space so that you can start evaluating the function. You can start developing a real scope and start figuring out how to allocate funds and actually have success and peace while you do it. Find it on our website, audaciousdesigns.design under return on design blueprint. And thanks for listening today. We hope that it is valuable to you and it has you thinking in a new way of how you can actually be successful.

speaker-1: And if you like what you heard today, remember to hit that like button, follow, subscribe, keep up with us. Send us comments about your projects or questions you may have. We'd love to get into those and and help you out along the way.

speaker-0: Thanks for joining.