By Patrick Langston, The Ottawa Citizen
Bitten by the spring home renovation bug? A quick coat of paint won't break the bank, but bigger renovations can get out of hand, leaving you with a glittering new kitchen or a to-die-for deck, but a scary pile of bills as well. Here's how the pros advise keeping renos affordable.
1. Plan, plan, plan
"I never do a job where the client says, 'Just go ahead and fix it," says Paul Denys, owner of Ottawa's award-winning design-build firm Denys Builds Designs (www.denys.ca). "I want the client engaged from the start." That means you should be researching, planning and budgeting at least some of the project yourself.
Want a new bathroom? Spend a day checking out developers' model homes: builders know exactly how to get the most bang for the buck, and you'll have a more tangible sense of what could work in your own home than by just leafing through home decor magazines.
Shopping for kitchen fixtures? Visit big box stores, but also higher-end plumbing centres, and specialty kitchen and bath suppliers. You might discover that $69.99 faucet set isn't really such a bargain when you measure price against longevity, ease of use and simple good looks.
Speaking of visiting, the Ottawa Home & Garden Show at Lansdowne Park this weekend brims with exhibits and ideas for your reno project. And a trip to http://home-design-software-review.toptenreviews.com will help you choose from 10 home design software packages for renovation planning.
Other resources include free, online renovation guides from Canada Mortgage and Housing Corporation (www.cmhc-schl.gc.ca/en/co/renoho/index.cfm) and from RenoMark (www.renomark.ca/ottawa/get_renoguide.asp). RenoMark is an industry-operated organization dedicated to raising the customer satisfaction bar in the home renovation market. Its free services include a directory of local contractors who have signed on to RenoMark's code of ethics and practices.
2. Ka...ching, ka...ching
When it comes to costs, renos are all over the map. Some folks spend $10,000 on a kitchen upgrades, while others fork out five times that. There is a guide to renovation costs at www.ontariocontractors.com/costs.htm, but it's rough. It says installing wood floors, for example, can run from $5.50 to $12 a square foot.
One way to keep renovation costs in line is to dress up a room with accessories instead of splurging on a whole new wardrobe. Flooring, plumbing and cabinetry can be very expensive, so work with what you've already got. Denys has given tired kitchens a fresh look by adding an island, new countertop and other goodies but not touching the cabinets or floor, for example.
He adds that a cost-conscious renovator knows tricks like stealing strips of hardwood from a closet to patch a damaged floor elsewhere in the room; less expensive wood can then be laid in the closet where it will never be noticed.
Homeowners overspend on renos in two main ways, says Ottawa's Ren Molnar, a former contractor and co-host of the popular national radio talk show Renovations Cross Canada.
Novice do-it-yourselfers typically dream too big, he says. They'll start off just finishing the basement, but soon find themselves awash in a sea of work and debt because they add a bathroom, a granite countertop for the bar, and other frills.
When it comes to hiring a contractor, says Molnar, people often fail to put exactly what they want in a contract or change their mind mid-project. Then they're shocked at the size of the bill. "They'll say, 'Oh, while you're here . . ..' Well, hey folks, this truck and my equipment and my time didn't come as a Christmas present."
3. Surprises and the taxman Denys says that if you're renovating an older home, you should expect the unexpected. Not only have building codes changed -- which may mean parts of your home are no longer up to snuff -- but the house may already have endured sloppy renovations. Undoing others' work can be time-consuming and costly, as can discovering rot and the other depredations of age.
For these and other reasons, the experts suggest allowing for a 10 to 15 per cent cost overrun on any renovation.
And don't forget the taxman. While your municipal property tax assessment won't increase if you're simply upgrading windows or redoing a bathroom, tacking on an addition will likely spike your home's assessed value and your tax bill.
Adding insult to injury is the 13 per cent harmonized sales tax (HST) slated to become law July 1. The new tax blends the existing eight per cent provincial sales tax (PST) and the five per cent goods and services tax (GST). But because the HST shifts part of the tax burden from contractor to client, homeowners will pay up to eight per cent more tax on renovation projects under the new scheme. That's up to $800 more on a $10,000 renovation.
To fend off a rush of homeowners trying to avoid the increase by ordering renovation projects on June 30, the government has introduced a May 1 clause. It basically stipulates that projects subject to HST ordered on or after May 1 must be completed by July 1 to avoid the HST.
4. Financing your reno
With the demise of the federal Home Renovation Tax Credit two months ago, Ontario homeowners are back to paying for the entirety of many renovations themselves. Energy efficiency projects, detailed below, are the exception.
CMHC provides a good overview of financing options, including credit lines and mortgage refinancing, at www.cmhc-schl.gc.ca/en/co/moloin/moloin_020.cfm.
Banks offer a variety of financing arrangements that can include credit plans for home renovations. RBC Royal Bank (www.rbcroyalbank.com), for example, offers a Homeline Plan that blends mortgage financing, a car line of credit and a general line of credit at an overall interest rate of 5.41 per cent. Retailers like Home Depot and Home Hardware sometimes offer interest-free credit on renovation materials for six months or longer if you sign up for a company credit card. Just remember, those hefty credit card interest rates will kick in if you don't pay the balance when it's due.
5. Payback time
Along with savings from lower energy consumption, the federal ecoenergy program (www.ecoaction.gc.ca) and matching provincial grants can put money back in your wallet for energy efficient renovations. Installing Energy Star windows in Ontario, for example, means a total grant of $80 per unit.
You should also recoup a portion of renovation costs if you sell your home, says Denys. He points to a Remodelling magazine report (www.remodeling.hw.net/2008/costvsvalue/national.aspx), which shows, for example, that a deck addition that costs $10,601 has a resale value of $8,676, meaning you'd recoup 81.8 per cent of your cost (all U.S. dollars). If you remodelled a home office, however, you'd get back only 54.6 per cent of your outlay.
Denys suggests replacing major appliances more than 10 or 15 years old as part of your renovation. For one thing, new products are more energy and cost efficient. For another, you don't want to discover when the old fridge gives out five years from now that a new one doesn't fit in your renovated kitchen.
6. False economies
Final word of advice: if you're thinking about slashing costs by hiring a black market contractor -- someone who's unlicensed or charges no GST -- don't. They typically carry no insurance, offer no warranties and too often don't know what they're doing.
Molnar recalls a homeowner whose under-the-table roofer claimed to have been trained in a British apprenticeship program. He laid the first course of shingles incorrectly, rot set in, and the homeowner wound up having the whole job redone.
"By that time," says Molnar, "the guy was probably back in London."
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