Home Renovations: How to Manage Costs & Choose a Contractor

Your home is your sanctuary; your escape from the hectic world outside its doors. Of course, when you’re having work done on your house, that can turn things upside down for a while. And the final result is so often worth it; not only do you end up with the look you want, renovations to your home can greatly increase the value of your property when you end up selling it. However, if things aren’t managed correctly, home renos can also put you in a financial hole that could be difficult to dig out of – or a mismanaged renovation that adds a good dose of stress to your solitude. Here are some tips to help you make sure the project is nicely on track, before a hammer is lifted.    

Choosing a Contractor:

Choosing the right person to head up your renovation project is crucial to ensure that it remains on time and on budget. Here are a few pieces of advice to keep things moving along smoothly.

• Don’t rush into your choice, and meet with at least three contractors. In the Capital Region, there are more contractors and renovation companies than you could imagine. Take the time to meet with a few to see what the differences between them are.

• Ask the contractor to provide references, and do the leg work of following up with those people. It’s a good idea to even ask for clients of theirs that they are working with now, or had worked with very recently.


• Never pay the full costs upfront. There are some really great, professionals out there in the renovation industry. However, like almost any trades, there are a few bad apples out there who have no moral issue exploiting trusting homeowners. 10% of the total project cost is a fairly standard down payment on the project, though that may fluctuate depending on the scope of the project and materials cost. For the balance, work out a payment schedule with the contractor, and get it in writing, based on completion of portions of the project.

• Make sure everything is in the contract. If you really trust the contractor that you’ve chosen, you may not see this as necessary, however, it’s pragmatic to make sure that everything is in writing.

• Verify contractor’s licenses and make sure they are using licensed pros for specialty work. The average general contractor is not a licensed plumber or an electrician. Jobs like these are the domains of licensed specialists who do the work day-in and day-out. Make sure that the person doing your work is properly licensed and experience.

• Ensure that permits are pulled. Many home reno projects require permits from the local government before any work is done. For those in Ottawa, check out the city’s guide here: Do I Need a Building Permit? If you live elsewhere in Eastern Ontario, check in with your local municipality as regulations may differ.

• Stay in contact, but don’t be overbearing. If the crew is working during the day while you’re at the office, make sure you keep in regular contact with them. By the same token, by following a proper vetting process, you can have some faith that your hired contractor is responsible enough to work hard, and let you know when decisions are needed.

Financing your renovation:

• Set aside a contingency fund. Even with the most thorough plan possible, cost overruns are possible. Build this into the budget of the project (10-15% is a good starting point) so that things aren’t thrown wildly off track if the project turns up an issue.

• Explore rebates and grants for energy-saving, “green” renos. Both the province and the municipality offer a variety of credits and rebates for healthy homes. Here’s a good article as a starting point. There are also rebates offered by the provincial government for items such as high-efficiency furnaces, low-flow toilets, and other items designed for energy efficiency.

• Resist putting more into the home than you’ll get out of it. Even if you have the nicest house on the block, your home’s eventual sale price could be limited by the neighbourhood you’re in – so if you plan to sell in the short or medium-term, be conscious that there might be a limit to what you can get out of a house by what you put in.

• Speak to your insurance broker about the insurance implications of the project. Some renovations, remodels, home improvement projects or additions are likely to affect your home insurance policy. As an example, you may be eligible for a reduced premium in the case of a new roof installation; on the other hand, if you significantly upgrade a room like your kitchen, there could be much more value there that your current policy is not accounting for. Speak to your broker and make sure you have a handle on how your project will affect your home insurance policy, before you dive in headfirst.

Choose Wisely:

To sum up, take your time to do your research and don’t rush into making a decision on a contractor. And always thoroughly consider the financial and insurance implications of a large-scale investment in your home’s value. In the Capital Region and Eastern Ontario, be sure to touch base with your financial advisor and insurance broker before kicking off any project. Thanks for reading, The ONA Team.