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Frances Lawson

Breadcrumb Trail Links Homes How much should your renovation outlay be and what should you budget for? Author of the article: Mike Holmes Publishing date: Aug 13, 2021  •  August 13, 2021  •  4 minute read  •  Join the conversation Homeowners are running into a supply and demand issue. There […]

How much should your renovation outlay be and what should you budget for?

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Since renovating your home is about as hot as the real estate market right now, I’ve been getting many emails about costs and estimates for projects, and of course, how do you hire the right contractor?

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Homeowners are running into a supply and demand issue. There are many good contractors out there but they are busy. I have some of the best renovators and builders in my Holmes Approved Program and they are all booked months, even years, in advance. Unfortunately, that leaves the not so good contractors. I’m telling you now that the good ones won’t be able to start right away and you will have to wait.

It takes time to find the right contractor, and that’s why I call it the dating game. Do your research, check references, understand the process, and what’s involved in your renovation project. Knowledge is powerful — the more you know, the better the process will be.

What reno gives you more “bang for your buck”?

Home renovations can increase the value of your home, and the most popular rooms are kitchens, bathrooms, interior/exterior painting, and creating more livable space in your basement or outdoors. Smaller tasks such as decluttering and updating decor also help potential homebuyers see your home as a space they can live in.

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But how much is too much?

Watch out for over-improving. All those new features, over-the-top finishes can add up fast, mainly when that money should be used on more important things, like fixing the leaky roof or basement or replacing the old furnace.

What Should You Consider When Planning Your Budget?

Consider the age of the house, the size of the project, the complexity of the project. Is it primarily cosmetic, or do you plan on moving walls and rearranging electrical and plumbing? I always suggest adding 20 per cent to your budget for the unexpected.

So what’s this going to cost?

For general home maintenance, homeowners should budget one per cent of the value of their home. So, if your property is worth one million, then save $10,000 per year for the unexpected.

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Of course, this will depend on the range of finishes and materials you use. A bathtub at a big box store can cost $700, but a bathroom from a high-end store could cost $7,000! For renovations, here is a general breakdown of what to expect.

Kitchen renovations

A kitchen renovation with mid-range finishes can cost anywhere from $30,000 to $50,000 or more. Don’t forget about upgrading to energy-efficient appliances, durable countertops and a high quality exhaust fan — these all add up. If you can, consider increasing your budget if you are renovating your forever home and keep mobility and accessibility in mind. Remember, features like easy pull out and close drawers, spice racks, specialized garbage and recycling compartments can increase your costs.

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Bathroom renovations

A three-piece bathroom renovation with mid-range finishes should run between $20,000 and $30,000. Bathrooms usually involve a new tub and or shower, toilet, vanity, sinks, faucets, tiles, flooring, countertops, and light fixtures. If you plan on moving plumbing or electrical, this will require permits and licensed professionals. Also, do your research on building materials and products, like investing in a water and mould proof substructure and tile membrane, plus a good air extractor/exhaust fan.

Basement renovation

A basement renovation will be between $50 to $75/sq. ft but lean toward $75 to be safe. Again, I can’t stress the importance of spending your money on quality building materials. Remember, a basement has the potential for moisture, and before you do any major renovations, you need to make sure your basement is watertight. I’d also recommend using a coupling subfloor under any flooring, but I would only recommend tile, laminate vinyl, or carpet for basements. If a legal basement apartment is in the plan, then be prepared to have a big budget and a list of zoning and safety requirements. You should budget, between, $75 to $125 per sq. ft for a legal basement apartment.

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Painting

Painting can completely transform a home. If you are planning to do your entire house, hire a pro. They have all the equipment, are organized, and are efficient in their work.

The cost should range between, $9,000 to $14,000 for a 2,000 sq. ft house. However, if you are doing one room or a front door, this is a perfect DIY project! A single room, 10-foot by 12-foot, ceiling, walls, trim and doors should cost between $500 to $600, including paint and labour.

Take “free estimates” with caution

Most good general contractors will charge for a detailed estimate as it takes time to do a site visit and put an estimate together. However, most contractors will credit the amount against the final invoice if the project is a go. Estimates should cost between $250 and $500, depending on the scope of the project. If you get a verbal ballpark, make sure you still get a detailed estimate before entering into a binding contract. Also get a sample payment schedule before hiring anyone.

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A detailed estimate lists every item going into the renovation, from specific materials, brand names, and fixtures to permits. It shows you exactly why one contractor might charge $100,000 when someone else is charging $85,000 — so you can compare the brands or materials they’re using.

Renovations are a massive investment, and if you don’t know what you’re getting into — a renovation can quickly go wrong. Finding the right contractor is the most significant step of the renovation — and having a good understanding of the project’s scope, materials, and costs will make your renovation journey much more manageable. Take your time, do your homework, and breathe — it will all come together.

Listen to Mike’s new Holmes on Homes Podcast on all major streaming platforms.

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