How To Finance Your Renovation?

Finance Your Renovation

Mike Donovan, Mortgage Broker and owner of Verico Coastal Mortgages Inc, has advised one of our co-owners how to finance their renovation. We value his expertise and experience and have since asked him to break down the scary stigma around financing your renovation and the steps required to obtaining funds.

First Things First…

Your first step when determining how to finance your renovation is a phone consultation with Mike. During this conversation you will discuss, information regarding your income, employment, existing mortgage and a desktop evaluation of your home. This information will determine the next steps and the preferable option for you.

Preferred Option – Cash

Mike explained to us that the most preferred option to finance your renovation is cash. The benefit of paying with your savings or readily available funds means you won’t be paying future payments. Everything will be paid there and then. However, let’s be realistic, it’s very unlikely many of us will have $100,000 in our bank accounts right now (Congrats if you do).

A Home Equity Line Of Credit

In this case, a home equity line of credit could be your best option to finance your renovation. This will allow you to draw out money and pay it back over time. This is typically in monthly interest only payments. Ultimately this means you’re not paying interest on a huge sum as you only need to advance the funds when required. However, not everyone will have this as a viable option due to a number of factors which include lack of equity or provable income.

Refinancing Your Mortgage

Refinancing your mortgage is another option and one that could be preferable if you do not qualify for a line of credit. It’s a particularly good option if it means that you’ll get a lower interest rate in the process. It’s important to note, if you have a low income, it’s unlikely you’ll qualify for this option with a big bank or credit union.

Alternative Financing

Alternative financing could be the best option to finance your renovation if you have issues qualifying and plan to sell after your renovation. You can gain this type of loan from alternative lenders and private investors. They tend to have higher interest rates and fees. This is a good option for people with low credit ratings or a low income. Upon completion of your renovation the goal would be to realize a large enough gain after sold to offset the borrowing costs.

Construction Loans

Construction loans are used to make major renovations. They are normally advisable if the renovation will cost more than the equity that you have in your home. This is a short term loan and the money is released as the work is done. This loan is then converted into a mortage after the build out is complete.

Credit Cards

Credit Cards can help you cover smaller renovations of around $50-60k or parts of a larger renovation. However, they typically carry higher interest charges than the options discussed. You wouldn’t want to carry large balances for an extended period of time. It is however, a great way to rack up some points on your card and earn something back such as flight tickets.

A Simple As That

This is a high level overview to give you an insight into the different options when considering financing your renovation project. It may seem scary or intimidating, however, all it takes is a quick phone call to establish your next steps in a transparent and professional manner. Contact Mike or a Mortgage adviser of your choice and discuss your options further, as every case can differ.

Take the first step today and contact Mike here.

Get an estimate request from us regarding your renovation today

An opportunity to skyrocket your land value and make $$$!

Increase your land value

Great news for homeowners who want to increase the their land value by creating laneway and duplex homes.

Vancouver city council have approved changes allowing more development on RS (single family zones) and RT (two family zones), meaning you can increase your land value. More affordable housing and the desire to protect heritage homes has influenced this change. This is a win-win for landowners and those of us looking to purchase more affordable homes.

Vancouver City Council’s – Two Approved Changes:

1. RS (single family zones) is the lowest density regions and covers over 80% of vancouver’s land mass. Those in RS zones can now build, sell or rent laneway houses on their land. The catalyst for this change is to protect heritage homes. 
2. In denser RT (two family zones in the Grandview Woodland and Mount Pleasant area) the number of homes on a standard 33-foot lot can increase from 2 to 3. This means you can have a duplex and a laneway house to sell or rent.

At the moment, heritage homes are being pulled down and replaced and create more affordable housing.  The changes n0w protect heritage homes. As a consequence, if a heritage home is demolished, the city will limit the size of the new house you are able to build.

What does this mean?

If your current home is on a RS or RT zone you are able to increase your land value. You can build a laneway home or turn your home into a duplex. This means, in effect those in RT zones could live in one element of your home, and sell or rent off the other two. Pay off your mortgage and possibly even make an income. As a result it means there will be more affordable housing available.

Act now

Find out more about these changes and how we can help you renovate/build to skyrocket your land value. Contact us at 778-379-4403 or get a free consultation here. 

What To Ask Before Renovations Start

Know What To Ask Before Renovations Begin

Renovating your home can be an overwhelming task. Knowing the right questions to ask can really help you manage your expectations and build a trusting and transparent relationship with your contractor.

It’s your home, your money and your vision! You want to ensure you investigate and explore all of your options and know what you are singing up to. Think of your first meeting with your renovator like an interview. You need to know that you can work together and trust them. Find out what you need to ask before renovations start.

Ask about the company

How long have they been doing business? If it’s a long time, it’s likely they have completed successful renovations and have happy clients. It also means they will most likely have built strong relationships with suppliers which means you’ll have lots of choice of material and perhaps even a cheaper rate.

Who will be at the renovation site?

So far you may have only dealt with one person, but who will be at your home every day? Do they have employees or is it contractors? What’s the process of opening and locking your home if you aren’t there? How often will you need to be on site/available? All important questions to find out to help you plan your work/life balance while your renovation is taking place.

How will you present the budget and how do I pay?

Some contractors will tell you the top line cost. Others like us at reVISION Renovations provide a detailed and transparent cost breakdown. Will you be able to see all the material costs, design time costs and mark up? How will you be paying for your renovation? Will you be paying in one lump sum, weekly or as items are billed?

How will you protect my home and the items in it?

This must be asked before the demolition stage. Is there a process for protecting your belongings and anything in your home that is remaining throughout the renovation. For example, ask do you cover carpets/flooring. Do you move furniture? It seems like a simple question, but you will be able to gauge the level of professionalism and care the company take by their answer given.

Will you obtain the correct permits and design around this?

Some contractors will try to cut corners. It’s important that you obtain the correct building permits and that your design has been worked around the limitations of this. Ask about this process to ensure your new home will be to code. All of our team including designers understand the code and regulations. This will save you time and money.

How will you communicate with me during the renovation?

It’s important you express how involved you would like to be during the renovation. Do you want to be called or emailed? What does your renovator normally do when decisions need to be made. How often will you need to come back into the office? If you don’t click with the people at the renovation company, or don’t like how they work, it’s likely your whole renovation process will be a struggle.

Is there anything about my renovation that concerns you?

Is there anything the renovator is concerned about? Or perhaps, is there anything they are not capable of completing for you?

How long is this renovation going to take?

You need to make plans to either live in an unaffected area of your home, stay with friends/family or get a hotel or Airbnb. You need to ensure it’s a realistic time scale which will help you set your expectations.

Our goal at reVISION Renovations is to help clients love their homes. We do this by guiding them through a clear and transparent renovation process, supporting them every step of the way. Before renovations, during and after.

Request an Estimate Today

Yesterday’s History is Today’s Mystery

Follow up blog: Yesterday’s History is Today’s Mystery

A few weeks ago we wrote a blog in response to the recent poll from CIBC which found that ‘86% of people agree that renovations end up costing more than you plan for’.

We highlighted that exploratory work is one of the most important things to keep in mind when considering costs. Something which our recent renovation just discovered.

The Discovery

During the initial stages of a new renovation project, our team was demolishing the outside of the home. While pulling down the stucco siding of the home, they discovered another layer of a shingle sitting behind this outer stucco layer.

This new discovery was about to get even more interesting when one of our team heard a smash and realized they had put their hammer through a window behind the outer siding. The photos below show the current window sat next to the recently discovered original windows.

It soon became very clear there was a whole new layer under the stucco. A surprise that none of us expected!

The current owners had no idea the shingle or old windows existed behind their outer wall. The discovery provided a interesting ‘window’ to the past and painted a picture of how the original home would have looked. Our clients must have had similar taste to the original owners as they actually want a shingle effect for their new home. Little did they know they will actually be renovating their home to look more like the original than it did before demolition. Pretty charming right?

Other interesting discoveries included a milk delivery door which would have once been used for the milk man to deliver milk and the owners to collect it in the morning. A endearing blast from the past which reminds us how much architecture and homes have changed over time. Don’t worry, the owners have kept as much of the old material as possible and even plan to use the old milk delivery door as decoration in their new home.

The issues

I can hear what you’re saying… if the current owners want shingle siding why wouldn’t you restore the original and use this? We wish we could. Unfortunately the method that had been used to stick the stucco siding to the home had required nails to be hammered into the shingles, meaning many of them were too split to salvage. What this means is the demolition is not a simple job, the job technically needs to be done twice.

This discovery will end up costing more money in the long run, which will of course affect the expectations of the client. Where possible we try to keep the costs down for clients, however there are of course some unexpected situations which are out of our control. This is why it’s paramount to understand that exploratory work can be costly and to always consider this before planning out a budget. We created a handy checklist of items to consider before renovation begins. 

With that said, if you want a job done well, it’s important to do it properly. This home will look fantastic, increase it’s value and will no longer have any hidden surprises.

86% of people agree that ‘renovations end up costing more than you plan for’

A recent poll by CIBC found that 86% of people agree that ‘renovations end up costing more than you plan for’.

With over half of Canadians polled by CIBC planning to renovate their homes this year, we look into, ‘why does the renovation end up costing more than you initially thought?’

Incorrect expectations can be ‘nipped in the bud’ by creating a realistic plan, sticking to it and not forgetting that exploratory work has to be done before the renovation begins. Cost are easily controlled. Yes, of course, from time to time there may be situations where costs have to be increased due to unforeseen circumstances. However, the majority of the time, the reason renovations cost more than expected is because plans haven’t been properly thought out and investigated.

It’s important to do your homework and go into a renovation with a good understanding of what your budget can achieve. We recommend checking out Houzz and other resources. Keep in mind many TV renovations will be more expensive than they suggest, plus they are often not based in and around Vancouver, therefore your budget may not stretch as far. 

With that said, we totally understand it’s very easy to get carried away, making changes on the fly to upgrade fixtures or whole rooms during the renovation process. However, it’s important to know these decisions can quickly escalate the original costs. Without a project manager to help steer you on course it can be hard to keep track of the bottom line.

Renovation planning is key! When starting out the renovation process is very important to have a clear plan that includes the less glamorous elements of your renovation. For example, you might want to open up your living and dining room by knocking down a wall and be fixated on making the area modern and sleek. However, by focusing on the glamorous interior design tasks, you may have forgotten that it costs money to examine the room initially. Is the wall able to be pulled down? Does the room need to be leveled? These are all aspects that are easy to overlook. Don’t get carried away with how you want your end renovation to look and forget about the logistics.

It’s best to not have a cost expectation until your exploratory work has been completed. This can really have a huge impact on your budget and how much you want to invest in your property. When discussing the renovation in the initial stages, it’s important to be realistic. When picking out fixtures and fittings later on in the process, remember why you agreed on that budget and stick to it. Keep in mind, changing a fixture could ultimately have extra added cost such as further design time or manual labour costs. That upgraded flooring you have picked, may take twice as long to install and be twice the cost.

Here at reVISION Custom Home Renovations we see a project through from start to finish. We have project managers who manage the budget and day to day tasks. Our interior designers understand the budget and most importantly are educated on essentials such as building permits and zoning. No one will put anything in front of you that is not realistic or possible, therefore helping manage your expectations in the long run.

We have created this handy checklist which highlights the more exploratory elements some clients forget about when renovating. Everyone in our company follows this checklist during each renovation project. It means we don’t miss anything, and ensures client’s have a true understanding of how much their renovation is going to cost them. Very important information if you are looking to improve the value of your home.

Download our free checklist

Relevant blog posts:

Probing Questions to Consider When Hiring a Renovation Company

Your Home Renovation Budget is Too Low

Into the Home Renovation Unknown

Probing Questions to Consider When Hiring a Renovation Company

With so many different renovation companies and Design Builders out there its hard to compare one to the next. Below are a set of questions to ask yourself and then to ask the firm you are thinking about hiring. To make it easy, we’ve put down our answers for you.

1. Is it important to you that your contractor is truthful and transparent with construction costs?

reVISION Custom Home Renovations passes on our wholesale costs directly to our customers. There are no hidden costs. You see our invoices we get from our vendors and suppliers.

2.  Is it important to you to hire a firm to take care of all the details and paperwork from beginning to end

From Proposal to final construction inspection, reVISION Custom Home Renovations handles all the details for you. Our team of expert designers and project managers will pilot you through budget, design permits and construction so you can sit back and enjoy your new space.

3. Is it important to you to have a working budget at the start of the project?

With our clients we build a rough budget. Our design team uses the rough budget to drive toward your goals. Before construction starts, we review a final working budget with you to approve or tweak before we get started.

4. Is it important to you to be updated weekly on your project budget?

Each week our office manager will send you a budget update on what was spent versus what was budget and what is remaining

5. Is it important to you to work with a Firm that is BBB accredited?

reVISION is an accredited BBB business. Accredited businesses have been reviewed by the BBB and reVISION is committed to BBB Code of Business Practices. Those practices are: Build Trust, Advertise Honestly, Tell the Truth, Be Transparent, Honor Promises, Be Responsive, Safeguard Privacy and Embody Integrity

6. Is it important to you to work with a cohesive design and construction company?

Our designers and project managers are full time revision employees and only work on reVISION Projects. We do this to deliver a consistent product and a seamless customer experience.

7. Is it important to you to work with a firm current on all the new building bylaws and construction practices?

Our team is trained and experienced with the latest construction bylaws and practices to not only get through the permitting and inspection process quicker but to deliver you a safe and energy efficient home.

8. Is it important to you have a detailed renovation agreement?

With our clients we review and agree to a very extensive renovation document that protects all parties.

9. Is it important to you for the workers to be safe?

All of our projects are equipped with the necessary protections and first aid equipment.

10. Is it important to you to work with a firm that has a very detailed design and construction process?

We don’t “wing” it here at revision. Each project goes through the same steps every time to minimize surprises, improve the customer experience and delivery of a consistent product.

11. Is it important to you that a renovation company can accept visa and mastercard?

For our customers convenience and benefit we accept Visa and Mastercard. Many of our clients have gone on vacation with the credit card points they accumulated paying for the renovation.  

12. Is it important to you to have custom design that’s uniquely yours?

No two customers are the same. Our designers work with you to deliver a renovation that’s uniquely yours and will improve the quality of your home life.

13. Is it important to you to meet the management team before work starts?

We will be in your life for a long time. We encourage clients to meet the reVISION team to get a feel of what we are about and if we are a mutual fit.

14. Is it important to you to minimize any surprises or unforeseen costs?

Our team will do “exploratory” work to discover as many unforeseen items as possible in order to minimize surprises that renovations can bring.

Into the Home Renovation Unknown

I’ve written about typical things people miss in their renovation construction budget. There are also costs which we call unknowns. Unknowns are costs that we renovation contractors can sometimes predict but can only confirm by taking your home down to the studs and checking with local building bylaws. When going into a renovation, consider a contingency for unknowns. Value your contingency at approx 20% (above your renovation budget) for single family and 10% for condominiums. The older the building, the higher the percentage.

Here are some of the common and costly unknowns we find.

• Poor or out of date service lines in renovated area – corroded plumbing pipes, knob and tube wiring, Polybutylene piping  are just a few examples
• Squaring existing walls and levelling floors – your home has settled and moved since it was built its quite likely some work will have be done to straighten things out.
• Requests from local building department – depending on what work is being done and its dollar value, cities can request things like drainage upgrades, sprinkler installation and energy efficiency upgrades.
• Zoning – You may be in a home that is non conforming to local zoning. This is usually as a result of renovations done without a permit. Some common problems are too many openings on the side of the house facing the neighbour, enclosed decks pushing FSR out of legal range, illegal rental suites, etc.
• Building Code – insulation, windows, framing, stairs, rails, you name it may have been installed under outdated building code. Granted there is a certain amount of grandfathering of old code providing you don’t need your contractor “touch the old code item” for your renovation.

Related topics

• Your Home Renovation Budget is Too Low
• Who needs a permit for a renovation?
• Lets be Honest…You’re Probably Going to Freak Out

Your Home Renovation Budget is Too Low

Talking about renovation budgets (or even thinking about them) can be very painful to most of us. However they become even more painful when your home renovation is complete and you’ve gone 50% over the original estimate. You started with the best intentions but the construction bills are coming in and now you may have to eat mac and cheese for the unforeseeable future.  So what can you do? Well lets start from the beginning before the renovation even starts.

You are a smart person and did a lot of home renovation research. You’ve got quotes from all your construction trades and suppliers and proudly put it in a excel spreadsheet. What could go wrong?

Here are a few things you may have missed in your calculations. They may seem like small costs but all together can add 20% to the final total.

• Delivery of materials – Sorry the Civic won’t be helpful transporting the new tub or a bail of 2 x 4s. Ask your suppliers what the estimated delivery charges will be or have them to include it in their price.
• Garbage – There is a lot of garbage created in renovations. Allow for a garbage bin, disposal and recycling charges.
• Permits – Both Building and trade
• Floor levelling or subfloor replacement – The old shag carpet comes up and guess what? The carpet covered the wavy floor. Chances are you’ll need floor levelling before you put down hardwood, laminate or tile
• Temporary Light and Heat rental. Your place is down to the bones, electricity and heating is off. You’ll need light so trades can do their work and heat to help dry the drywall mud and tape.
• Protection – poly, drop clothes, ram board, etc. All good things to help protect the new finishes and floors while the construction is carrying on.
• Cleanup – Construction is a very messy business. You’ll need cleaning services both on going and final. Probably should get your furnace ducts done too.
• Hazardous materials – Older homes (more then 25 years old) can have lead or asbestos in the materials you are about to demo. For you and your family’s safety, Hazardous Materials should be removed by professionals

Over and above these considerations, allow 10 to 20% contingency for renovation unknowns. The
higher percentage for single family homes and lower percentage for condos. I’ll write about renovation unknowns in a future post.

Related Articles

• Want to Love Your Renovation and Wow Your Friends?
• Who needs a permit for a renovation?

Lets be Honest…You’re Probably Going to Freak Out

Three things are certain, death, taxes and a renovation freak out.

You consider yourself as being a pretty level, reasonable and normal person. So let me give you a scenario: Your living in what used to be your house, its been messy for two months, things dangling from the ceiling, different people going in and out, a bar fridge and microwave have been your kitchen, no matter how much you clean there is always dust, your contractor says its going to take longer then expected, you’ve spent more money then you expected, everything looks unfinished….so how do you feel now?

Ok..so here’s what to do

1. Accept it’s going to look worse before it gets better. One of the highest points of anxiety is at the framing stage. Its hard to imagine what the place is going to look like when all you can see is boards tacked up here and there. Trust me you’ll fell better once the drywall is up and you can start to see what your home renovation will look like.
2. Move out of the house. You think you can handle living in a renovations but you probably can’t. You may have to suck it up and live with some family. Moving out may not be an option for some people so plan a lot of time away for vacation, weekends away, anything. Seriously, add a line item to your renovation budget for time away. You’ll need it.
3. Remember the contractor has the same goals as you. He’s not the enemy here. All he wants is to finish the job, on budget and for you to be happy. I don’t know a contractor that likes going over time and budget. So take a deep breath, communicate with your contractor and take a solution approach to challenges that come up.
4. As much as you may be tired of the kitchen you lived with, once its been taken out you may miss it. Crazy? Not really. Remember, even though your place might have been dated or old there were a lot of memories created in your house and now its changing. Change can be stressful, just remember why you wanted the renovation  and visualize yourself in your new beautiful home.

Related Articles

• Want to Love Your Renovation and Wow Your Friends?
• Who needs a permit for a renovation?

4 Steps to Building Your Dream Room – Wine Cellar Edition

“Where there is no wine there is no love” states president of reVISION, Todd Senft. Wine plays witness to our most intimate moments. Over wine we fall in love, celebrate, negotiate, and simply relax. It is the music that underscores our story. Building a wine cellar in your home is a special way to celebrate that most special of substances. With inspired design, wine cellars not only protect your liquid assets, they add flair, intrigue, and prestige to your home and create a unique space for wine tasting and entertaining. You expect the best from your wine and should demand nothing less of the designer and contractor building your dream room. Here are 4 steps to follow.

1. Needs Assessment

The designer should meet with you to assess your needs, budget, and space. Here are a couple of questions you should ask yourself:

*How will the room be used – simply for storage or also for entertaining? *What style do you want – a taste of Tuscany or a sleek, modern design?
*What type of racking is required?
*What are the technical considerations – humidity, ceiling height, ventilation requirements?

Remember the construction of a wine cellar must satisfy the essential conditions for wine preservations.

2. Design

The designer will present multiple design approaches for your consideration and approval. Carefully review lighting options and finishes for floors, walls and cabinetry – these elements will define the flavour of your room.

I recently read an article, “This Man Put A Secret Window On His Kitchen Floor. The Reason? GENIUS“, I was inspired by the creativity of the designer. An absolutely stunning idea.

3. Construction

A qualified contractor will provide a comprehensive schedule, certified trades and warranty. Read 8 Successful Home Renovation Steps – Hiring A Professional Contractor to get an idea of what to look for when hiring a qualified contractor.

4. Cheers!

Remove the cork fill a glass and enjoy!

Creating a wine cellar for your new or existing home should be like a fine wine … easy on the palette with a lovely, lasting finish.