More than 30 percent of Canadian homeowners spend more than they plan to during renovations. If you aren’t prepared, the process can become a rocky road. Here’s my guide to navigating the terrain and ensuring yourself a smooth ride.


Stick to your limit
Setting a budget is the most important part of renovating. Price everything out first. Ask friends and family what they paid for their new bathroom renovation or finished basement and try to learn from others’ experiences – both good and bad. Be wise about your investment. Experts might advise you to keep your renovation between 20 to 30 percent of your home’s market value to guarantee a return on your investment, but the real estate market has been crazy for the past decade and investing more than the typical rule of thumb can lead to greater profit if and when you sell. Buyers can spot a shoddy renovation so if you’re going to spend more money, you need to guarantee that the workmanship is impeccable and that the materials used can garner the increased list price. If not, you could be sitting on a property for months as you watch your investment disappear in carrying costs while you wait for your home to sell.

Know where your money is going
After you’ve met, checked references and secured a written estimate from at least three licensed, insured and bonded contractors, be meticulous when it comes to drafting the contract. The bigger the project, the greater the chance that it may go over budget, so have your expectations clearly established from the start. Discuss an estimated time frame for the job, settle the payment terms, secure warranties and even talk about how your existing property will be protected once the work begins. Most importantly, write it all down and watch out for the low-ball quote. If you think it’s too good to be true, it usually is. Get a detailed breakdown and scope of work and define anything that might be considered an “extra,” such as upgrading the quality of the paint used. If you’re doing the work yourself, keep a detailed account of all of your expenses and receipts so you can stick to your set budget for your home renovations.
Set up a contingency fund
A good rule of thumb is to put aside an additional 20 percent of your budget to accommodate costs that will inevitably pop up. The cost of renovating can vary so much and you never know what you’re going to find behind the walls. Making changes is allowed, but know when to draw the line and try to stick to as many big-ticket decisions as possible to avoid climbing material and labour costs.

Scale it back
In a poll by the Royal Bank of Canada, the most common renovating complaint from homeowners was going over budget. If you’re new to the game, you might not have the expertise or the time to balance your budget effectively. Scaling back is not as hard as people make it out to be. You can still get an amazing look without forking over the big bucks. I always advise people to use an inexpensive tile, for instance, to avoid paying higher than necessary prices for materials. When your renovation is complete, don’t be shy about inviting a realtor in for an evaluation. If you’ve managed to stay roughly on budget and on time, you might be very pleasantly surprised by the result.