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Guide to planning and budgeting for your home renovation

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I get a lot of emails from homeowners asking for help to plan and budget for their home renovations. Two questions I get a lot are: How much should I budget for home maintenance, and what’s a reasonable amount for home renovations? These are loaded questions, with many factors to take into account, like timelines, budgets, materials, and contractor choices at play. 

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The age of your home also matters — older houses often demand more repairs and upgrades. 

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Here are some tips to help guide you on how to plan your home reno budget:

Buying a home is a significant investment, and like any valuable asset, it requires regular maintenance. Think of it as if you’re going in for an annual physical checkup to make sure you’re doing well and are healthy. Similarly, when it comes to your home, it’s important to address crucial issues before delving into cosmetic updates. From simple things like gutter cleaning to annual HVAC inspections, regular maintenance can help prevent major issues and save you a pricey repair cost down the road.

Experts usually recommend saving around 1 per cent to 5 per cent of your home’s purchase price annually for maintenance. For example, if your home cost $1,000,000, aim to save around $10,000 per year. This savings strategy helps ensure you’re prepared for significant replacements, such as a furnace, water heater, or roof, as your home ages.

Now that you’ve budgeted for the essential items, let’s look at how much budget you have left over for your renovation. Consider factors like the age of your home, the project’s size, and its complexity, when planning your budget. Is it a cosmetic update, or are you considering structural changes?

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Remember to set aside 20 per cent of your budget for unexpected costs, which is an excellent idea given the unknowns that could arise during renovations.

Some renovations can also significantly boost your home’s value. This is important to consider, especially if you’re planning to sell your house. Kitchens, bathrooms, interior/exterior painting, and additional livable spaces are popular upgrades that can boost the value of your home. 

Avoid over-improving. New features can be exciting, but remember to budget wisely. To ensure long-term durability, prioritize necessary repairs over luxurious finishes.

Once you have an idea of your budget, talk to multiple contractors and get multiple quotes. A thorough quote, which includes materials, brands, fixtures, and permits, is essential for comparing contractors and making a decision about which one best suits you. And don’t forget to document everything. 

There are a few other things you should also keep in mind when planning your reno. 

Educate yourself by gathering as much knowledge as possible about the project’s scope. Informed decisions lead to better outcomes. Talk to multiple experts and ask lots of questions. 

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Prioritize the exterior’s condition over cosmetic interior jobs. A home inspection is a good idea before you start, as it establishes a baseline for the current condition of your home. This will help you make informed decisions and prioritize which upgrades and repairs to begin first. 

Don’t forget to file for the right permits for the job. Depending on the work you’re doing you may need to file for an electrical permit as well as a building permit. Plumbing and HVAC installation will also require separate permits. I always advise homeowners to double-check with their local building authority to find out what is needed, before they start the project.

Review your insurance policy before renovating. Depending on the extent of the renovation, additional coverage may be necessary. A large upgrade will increase the value of your house, requiring a re-evaluation, which could affect your current policy and costs. So don’t forget to notify your insurance company once the work is completed.

Dealing with product substitutions during renovations can be challenging due to supply-chain disruptions. Having a re-selection process with alternatives, to manage potential delays, will help you make sure your renovation goes smoothly and that quality isn’t compromised.

Most importantly, watch out for contractors who request a big upfront deposit. That is a red flag. Finding the right contractor is crucial. Regular communication and updates are suggested.

Managing home maintenance and renovations involves careful planning. Educating yourself, taking necessary precautions, and maintaining open communication with contractors will lead to a successful home-improvement journey. So, take your time, do your homework, and remember — it will all come together.

Residents of the GTA can apply for Holmes on Homes: Building A Legacy at

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