When renovating your home, the most important component is to know your budget. Developing a realistic budget will help keep your project on track. We spoke with Nick Malfara, President of Design-Spec Building Group Ltd., a company that specializes in residential renovations and custom home building in the GTA, for his advice on developing a sound budget.
Conduct a needs analysis
When homeowners’ lifestyle or needs change, they either need to move into a space that will accommodate said changes, or change their existing home. Malfara says it is more cost-effective to add space than to move due to land transfer taxes and other costly expenses. In such a case, Malfara will have a conversation with his clients in the initial phase of a project to determine what the reason is for the renovation. “Does the homeowner want a new kitchen or a bigger house?” he says, referring to the conversation as a needs analysis. “A needs analysis should outline both the square footage space requirements and specific needs homeowners require,” says Malfara. If you have three children and you would like each to have their own room, include this in your needs list. Do you need to have a home office space, or a soundproofed space for children to practice music in? It’s these kinds of needs – or wants – that will drive the home renovation project, he says. Your needs analysis will be used to determine the type and calibre of materials that will be required and the amount of work involved in the project.
Look at your needs analysis and prioritize your needs. Those priorities will depend on your intentions with the home. If you’re planning to leave the home in a couple of years, you may want to prioritize renovations that will add value to your property immediately. Design-Spec Building Group will be able to tell you what renovations will increase resale value and which ones to avoid. If you’re in your forever home, you will likely prioritize those elements that make the home easier to live in for your family regardless of impact on resale.
Find cost savings in materials
Once a needs analysis is performed, have your contractor price out the work, including finished materials. If there’s a disparity between the desired budget and the quoted cost, homeowners can either increase the budget, or pare back on the caliber of finished materials used. “Instead of using a White Carrera marble floor, for example, they can use a porcelain tile that replicates the look of a Carrera marble but it saves 20 to 30 percent,” says Malfara.
Don’t discount hidden costs
While your budget should include HST, the cost of appliances and light fixtures, you will also need to build in a contingency. Malfara recommends a contingency of 10 to 15 percent. “[This accounts] for changes the homeowner makes on design or material selections or site conditions that need to be addressed and generally involve some cost,” says Malfara. Older homes should budget for the higher end of this contingency, as problems such as knob and tube wiring, mould or cracks in plumbing pipes can be uncovered during the renovation and will need to be resolved.
Thinking about a home renovation but don’t know where to start when it comes to ideas and budget? Take a look at Design-Spec Building Group’s profile on our website. Browse through the picture gallery and read customer reviews. They’ll be able to answer all your burning renovation questions!