By David Hornung, Co-Founder & Principal Designer, D&J Concepts

Every luxury Hamptons renovation begins with a number. Typically, the number is wrong. Not because the homeowner lacks financial sophistication. These are hedge fund managers and executives who model budgets for a living. Rather, the problem is that residential renovation lacks the transparent pricing commercial construction provides. A renovation cost breakdown for a $3 to $5 million Hamptons project reveals where the money actually goes. It also shows why budgets expand and what structural decisions prevent the overruns that transform exciting projects into expensive regrets.

The Hard Cost Structure

Hard costs, meaning the money spent on physical construction, account for 60 to 70 percent of a luxury Hamptons renovation budget. For a $4 million total project, that typically means $2.4 to $2.8 million. Importantly, these costs divide into predictable categories with ranges that reflect the Hamptons’ premium labor market and the material quality that luxury projects demand.

Structural work represents $300,000 to $600,000 depending on scope. Demolition, framing modifications, foundation improvements, and roofing all fall here. Homes requiring significant structural modification land at the higher end. In particular, older homes where load-bearing walls must come down to create open floor plans drive costs upward. Homes with sound structure requiring minimal architectural intervention land at the lower end.

Mechanical systems including HVAC, electrical, and plumbing account for $400,000 to $700,000. Notably, this category surprises clients consistently. Mechanical infrastructure is invisible yet expensive. Consider a luxury home with multi-zone HVAC, dedicated office climate control, and whole-house air filtration. Add updated 400-amp electrical service, smart home wiring, and replumbed bathrooms. That combination quickly reaches $600,000 in mechanical costs alone.

Finishes including flooring, tile, stone, millwork, painting, and hardware represent $500,000 to $900,000. Importantly, the range here reflects material selection more than any other variable. Italian marble at $150 per square foot versus domestic stone at $40 per square foot produces dramatically different finish budgets for identical square footage. Custom millwork at $350 per linear foot versus semi-custom at $175 per linear foot doubles the cabinetry line item. D&J Concepts provides renovation cost breakdown detail at the material selection phase, ensuring clients understand how each specification decision affects the total budget.

Kitchen and bathroom fixtures, appliances, and specialty installations account for $300,000 to $600,000. A Sub-Zero and Wolf kitchen package alone runs $80,000 to $150,000. High-end plumbing fixtures from Waterworks or Lefroy Brooks for a primary bathroom cost $40,000 to $80,000. Architectural Digest level kitchens and bathrooms require these investment levels, and clients who budget below them discover the gap between aspiration and specification during the selection process.

The Soft Cost Structure

Soft costs, meaning professional services and administrative expenses, account for 20 to 25 percent of the total budget. For a $4 million project, that typically means $800,000 to $1 million.

Architectural and engineering fees run $200,000 to $400,000. Meanwhile, interior design fees run $150,000 to $350,000, structured as either a percentage of furnishing budgets or flat-fee engagements. These professional fees represent the design intelligence that determines whether the hard cost investment produces a good house or merely an expensive one. McKinsey’s construction value analysis demonstrates that professional design investment reduces total project cost by preventing the change orders and rework that poorly planned projects inevitably generate.

Permits, surveys, insurance, and legal fees account for $100,000 to $200,000. Hamptons building departments, particularly in the Village of East Hampton and the Village of Southampton, require extensive documentation and review periods that add both time and cost. Environmental review for properties near wetlands, dunes, or coastal zones can add $50,000 to $100,000 in consulting fees alone.

The Furnishing Budget

Furnishings represent the remaining 10 to 20 percent of the total renovation cost breakdown, typically $400,000 to $800,000 for a full-home luxury Hamptons renovation. This budget covers furniture, window treatments, rugs, lighting fixtures, art, and accessories for all rooms. The per-room average for a luxury Hamptons home ranges from $40,000 for secondary bedrooms to $150,000 for primary living spaces.

Clients frequently underestimate furnishing budgets. The reason is straightforward: they calculate based on individual piece prices rather than whole-room requirements. Consider a living room that needs two sofas, four armchairs, a coffee table, two side tables, a console, a rug, and window treatments. Those 12 to 15 major purchases collectively reach $80,000 to $150,000 before art and accessories.

What Drives Overruns

D&J Concepts’ Farrell Building experience and 25 years of Hamptons practice have identified five primary drivers of budget overruns in luxury renovation projects.

First, discovery conditions account for the largest unplanned costs. Opening walls in older Hamptons homes reveals conditions that no inspection can fully predict: inadequate structural members, outdated wiring, corroded plumbing, water damage, and insulation deficiencies. D&J Concepts budgets a discovery contingency of 10 to 15 percent of hard costs for homes built before 1990 and 5 to 8 percent for newer construction.

Second, specification escalation occurs when clients upgrade material selections during construction. They choose more expensive stone, higher-end fixtures, or additional millwork beyond original specifications. Each individual decision feels modest. Yet the cumulative effect is not. D&J Concepts manages this through firm specification approval at the Visual Clarity phase, with a documented change order process that quantifies every modification’s budget impact before approval.

Third, timeline extension drives overruns through carrying costs. Extended contractor overhead, construction insurance, permit fees, and the opportunity cost of delayed occupancy all compound. Hamptons seasonal constraints make timeline management particularly critical. A project that misses its Memorial Day completion target continues through the summer that the client intended to enjoy, adding both financial and emotional cost.

Bain & Company’s project management research indicates that budget accuracy correlates directly with planning thoroughness. Projects with detailed renovation cost breakdown documentation, approved specifications, and realistic timelines stay within 5 to 8 percent of budget. Projects with general estimates and fluid specifications overrun by 15 to 30 percent. D&J Concepts produces detailed cost documentation as standard practice because the alternative, pleasant surprise, essentially never occurs in luxury renovation. The surprises are always expensive. Planning eliminates them.

The Contingency Framework

Every D&J Concepts renovation cost breakdown includes a structured contingency that clients sometimes question and always appreciate. The framework allocates contingency in proportion to risk. Pre-1960 homes receive 15 percent of hard costs, since discovery conditions are virtually certain. Homes built between 1960 and 1990 receive 10 percent. Construction after 1990 gets 7 percent, reflecting more predictable conditions under modern building codes. Contingency funds that are not spent are returned to the client. In practice, approximately 60 percent of contingency is consumed on projects with older homes and approximately 30 percent on newer construction.

The contingency is not a slush fund for specification upgrades. Its purpose is to address conditions discovered during construction that could not have been identified during pre-construction assessment. When a client wants to upgrade a specification during construction, that upgrade follows the change order process with independent pricing rather than drawing from contingency. This discipline preserves the contingency for genuine discoveries while preventing the specification creep that contingency funds enable when their purpose is not clearly defined.

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Read more: What Farrell Building’s Buyers Taught Us and Working with a Luxury Interior Designer.

David Hornung co-founded D&J Concepts in 2001 after training under Interior Design Hall of Fame inductee Steve Chase in Los Angeles. From Southampton headquarters, D&J serves clients across the Hamptons, Manhattan, Palm Beach, and Southern California. A member of the Society of Design Administration, Hornung brings 25 years of luxury residential design experience to every project. Discover the Visual Clarity Method at dandjconcepts.com.