A guide to setting a renovation budget
Renovations are great for a change of scenery, creating more functional spaces and most importantly, increasing the value of your home. That value, however, can be severely diminished if you end up spending more than your finances can handle.
With that in mind we’ve put together a guide on how to budget for renovations, so that you do not end up breaking the bank.
As a rule, you should not spend any more on a single room than the value of the room as a percentage of your overall house value. To do this, you will first need to get an estimate of your home’s value. Once you have that, use the percentages below as a rule of thumb when coming up with your budget.
% of Overall Home Value to Budget on Renovations, by Area:
Note: percentage figures courtesy of HGTV’s Scott McGillivray.
To give you some examples of potential costs we will base some calculations on the average residential price of an Edmonton & area home which is around $367,000 (CREA stats). Based on this overall home value consider your renovation spend by area to be approximately:
- Kitchen: $36,700 to $55,050.
- Master bathroom and basement: $36,700.
- Patio and Deck: $7,340 to $18,350.
- Master bedroom: $3,670 to $11,010.
- Powder room: $18,350.
Look at different funding options
If you’re borrowing money for your project, make sure you look at what deals are available and what type of loan will work for you. It might seem like common sense, but taking the time now to research your options and ensure that you’re choosing an option that will work for you will save you money down the line.
The Purchase Plus Improvements Mortgage is a way for new Canadian homeowners to borrow funds to spend on major renovations as soon as taking possession. Click here for more information on the topic.
Get quotes from contractors
Talking to a professional is the fastest and often the most accurate way to assess the total cost of a project. TradePros has hundreds of pre-qualified professionals across a wide range of categories who can help you complete your renovations.
Their experience and understanding of the finer aspects of a renovation are invaluable for accurately assessing the cost of a project. Find help for you next project here.
Follow the plan
While you’re in the middle of a renovation, it can be easy to get caught up in the excitement of a project and start thinking about other ways you can add value to your home. Always remember to take a step back and see how these changes would affect your budget and timeline. Reviewing the plan is the best way to avoid blowing your budget as even small additions to a project can carry unexpected costs.
Create a buffer
You should always include a buffer in your budget. It only needs to be +10% of the total cost of the renovation, however, that 10% can make all the difference in the event of other setbacks outside of your control — for example structural impediments/deformations discovered while the project is underway.
Rather than having to dip into your savings or borrow extra money, using your buffer can save you money in the long run. Renovations can be a fantastic investment for your home. By starting with a smart, well-researched budget, you can ensure that your project will be completed smoothly and without any nasty surprises.
As always please consult with qualified contractors. Once your ready to start getting quotes post your project with us and meet the best!
The TradePros Team