How To Properly Plan For A Renovation.
How to properly plan for a renovation.
Thanks to the upswing in the housing market over the past few years, many homeowners have accrued equity in their home. They have begun to use various forms of refinancing that has allowed them to use cash from their equity to pay for renovations on their home. This is a great idea if done correctly and you plan your renovation right. Well, how do you plan the renovation right? Renovation expert and licensed contractor Mike Holmes, has some advice for you.
"It takes longer to plan a renovation than to do it."
The goal of any renovation should be to add value. Too many times a homeowner will focus on personalization above all else and not consider whether or not the reno is adding value to the home. Mike says, "Whether it's in the materials and finishes, improvements to structure and mechanics, or just making it more comfortable for you and your family, the goal of any renovation is to add value." adding "It takes longer to plan a renovation than to do it."
Taking the time before a project actually begins, knowing your needs and spending more time on decision making before the construction begins, will lead to less wasted time with your contractor which can help control costs and work schedules. Time delays for one contractor can effect the timing and availability of another contractor. For example, if you have a delay installing your floors in your kitchen, it will delay being able to install the cabinets which will then delay the install of the counter tops. All of this could lead to more costs and further delays of completing the project.
Next, you need to find the right contractor if you're not doing it yourself. It's important that you do your own research and not just trust the advice of friends or referral websites. This is your property that is being renovated so you are the one that has to live with the results. Ask for at least 10 references. It's easy to do a good job on a couple houses, but you want to see a consistent body of work that shows great results. Speak to the homeowners of the houses the contractor renovated. Find out if they encountered any problems since the renovation was completed, if they had any issues during the renovation, was the job completed on time? Mike adds, "Check out their job sites in progress too, both during and after hours, so you get a real idea of how work is carried out, how orderly the jobsite is and how it's cleaned up."
Don't forget the contract. This is a crucial part of the planning process. You need to get the details on paper and lay out your expectations with the contractor. According to Mike, "The more detail the better. It should describe every single thing that will be done to your home, and include buffers for the unexpected, like not getting certain items or materials by a certain date or not getting the mechanics done by a certain time. This is also when you need to determine who (you or the contractor) is responsible for what permits. Unless it says in your contract that your contractor is responsible for getting all the right permits, you (the homeowner) will be responsible for getting them." The contract should also contain details on payment for the contractor. The best way to set payments are based on project milestones such as rough in, drywall and completed stages. This will keep the project moving forward and protect you as well. Be weary of any contractor that asks for a huge upfront down payment on the work. 30% of the total cost is a more than acceptable starting point. If the contractor isn’t flexible about establishing reasonable payment terms before even starting the project, it could be a warning signal that the contractor could be difficult to work with if other issues arise during the project. A rational contractor should understand that a homeowner shouldn’t have to pay for the job before it’s done, just as the contractor wouldn’t expect to wait to get any money after the job was done.
Taking the extra time ahead of the project to plan everything out right can save you a load of time during the project and save you a lot of money and headaches as well. Remember, it's your home you have to live in every day. It effects your resale value so you need to take your time with it. If you plan right, you can create a beautiful project that will last the lifetime of your home.
If you have any questions about how you can use your homes equity to finance your renovation, speak to one of our expert loan officers today!
This blog was inspired by Mike Holmes blog on renovation planning. His blog can be found athttp://makeitright.ca/resources/category/renovating