When you choose to up­grade in­stead of move

Gut­ting your home can be more cost-ef­fec­tive in this tight mar­ket


Chris­tine Davies and her hus­band were in their eas­t­end Toronto home for about six years be­fore de­cid­ing to pull the trig­ger on a mas­sive ren­o­va­tion.

With two young chil­dren and a house “lit­er­ally fall­ing apart,” Davies says, the cou­ple needed an up­grade but didn’t want to move up in the city’s pumped-up real es­tate mar­ket — where home prices have in- creased by about 25 per cent over the last year, ac­cord­ing to the Cana­dian Real Es­tate As­so­ci­a­tion.

“Find­ing the house we have in Toronto, a free-stand­ing home with a pri­vate drive­way — that would be very dif­fi­cult to find at an af­ford­able price,” says the 45-yearold health-data an­a­lyst. “It’s just more cost-ef­fec­tive to ren­o­vate.”

But that’s not to say gut­ting her home and build­ing a two-storey ad­di­tion hasn’t been with­out stress, she adds, in­clud­ing the ad­di­tional cost and in­con­ve­nience of rent­ing another house to live in dur­ing the eight-month process.

A re­cent poll for CIBC in­di­cated that as many as 56 per cent of Cana­di­ans em­bark­ing on ren­o­va­tions are choos­ing to stay in place in­stead of sell­ing their home and buy­ing another — for rea­sons rang­ing from want­ing to make a space that bet­ter fits their needs to in­creas­ing the value of their homes.

How­ever, the sur­vey also sug­gested that home­own­ers start­ing ren­o­va­tions worry about house­hold dis­rup­tions, project de­lays and over­spend­ing — de­spite the fact that 61per cent of peo­ple plan­ning to ren­o­vate ad­mit they don’t have a de­tailed bud­get.

CIBC says home­own­ers should do their re­search first by seek­ing ex­pert ad­vice from a real­tor, a trusted con­trac­tor and a fi­nan­cial plan­ner be­fore em­bark­ing on any ma­jor projects to de­ter­mine which op­tions will fit their needs and bud­get.

Know­ing if you will live through your ren­o­va­tion or move out is another key con­sid­er­a­tion and so is un­der­stand­ing what you can and can’t do on your own.

“Be clear about the goals and lim­its of your project as well as the costs be­fore you head over to the hard­ware store or pick up your tool box,” warns Scott Wam­bolt, se­nior vice-pres­i­dent of re­tail and busi­ness bank­ing at CIBC.

“While DIY can add up to some cost sav­ings, it could end up cost­ing you more if you don’t know what you’re do­ing.”

To keep her costs in check, Davies says she and her hus­band hired a fixed-rate con­trac­tor, whose price for the work in­cludes all labour, ma­te­ri­als, sub­con­trac­tor labour, equip­ment and other ex­penses.

“So if the scope of any­thing changes he lets us know ahead of time and we make de­ci­sions about whether we want to go with those changes or not,” she says.

Dan Brewer, pres­i­dent of the Ap­praisal In­sti­tute of Canada, says home­own­ers do­ing ren­o­va­tions also need to con­sider whether the project is be­ing done to in­crease the en­joy­ment of the prop­erty or to in­crease its value — or both.

In terms of ren­o­va­tions with the high­est re­turn on in­vest­ment, “the big­gest bang for your buck is bath­rooms and kitchens,” Brewer says, pro­vided that the qual­ity of ma­te­ri­als and work­man­ship is con­sis­tent with the area you live in.

Less ex­pen­sive renos that also pay you back in­clude up­dat­ing decor such as light­ing and plumb­ing fix­tures, or re­plac­ing or re­fin­ish­ing worn floor­ing — and even some­thing as sim­ple as a fresh coat of paint.

CIBC’s on­line sur­vey was con­ducted from May 10-14 among 2,068 An­gus Reid Fo­rum pan­el­lists who are Cana­dian adult home­own­ers.


A re­cent CIBC poll found that 61 per cent of peo­ple plan­ning to ren­o­vate ad­mit they don’t have a de­tailed bud­get.

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