As much as Toronto Life’s article on the Parkdale renovation from hell inspired a big backlash on social media regarding housing affordability and homelessness, the cautionary tale behind this story should not get lost in this response.
Toronto’s challenging real estate market is impacting all levels of society and pushing many into more creative housing solutions. For those already in the market, this often means transforming a starter home or fixer-upper into a forever home — likely a major renovation or even rebuild of an existing house. Avoid your own reno hell by learning from this family:
“We’ve learned a harsh lesson: there’s no way to shortcut a reno; they cost a lot, period. If we had just listened to the advice of realtors, architects, designers, tradespeople and many friends, we would have avoided considerable stress and, well, $100,000 in debt. We were the victims of a shoddy contractor and bad luck, but also of our own colossal ignorance and hubris.”
Here are some specific examples of things these homeowners did that prospective renovators and families seeking creative housing solutions can learn from.
They relied on the wrong person’s advice out of the gate
Real estate agents are licensed to buy and sell real estate properties. Do not rely on their opinions about whether a house is structurally sound. Though this couple mentioned their agent was a part-time contractor, it is generally not a realtor’s area of expertise. A good home inspection is very important, but also has limitations. Home inspections are only visual, which means they cannot rule out the possibility of structural issues that are not evident on the surface of a wall or floor. Beyond structural issues, there can be many problems inspectors can’t see which will create additional headaches and expense for prospective renovators, including deterioration caused by rot or termites, faulty electrical and galvanized steel or lead pipes. Given this reality, there will always be a certain amount of risk that there are hidden structural or other problems in a home. The question homeowners must ask is how large is this risk? Followed by: if these issues are present, is their budget sufficient to address them? Are they willing to spend time, money and energy addressing them?
They did not determine the ballpark cost of the renovation project before purchase
Most people have no idea what it costs to extensively renovate a home. In my experience, it is always more expensive than they think. While it depends on the scope of the project, and can vary from house to house, homeowners should start with a rough cost per square foot in mind when deciding if renovating an old home is the right option for them.
While these homeowners claim to have spent $560,000, which is a lot of money, it is a very low budget for a complete gut job on a crumbling Parkdale rooming house with total living space of almost 4,000 square feet. If you do the math, this means they spent no more than $124/sq ft. + HST, which is very low. However, we don’t know what they were including in the total cost.
Other families should not expect to be able to do a complete gut job on a crumbling old home for this cost per square foot if they want to do it right. I would be interested to see a detailed breakdown of how this money was spent, to know what this number reflects. Maybe the project wasn’t a full gut job. Maybe the figure doesn’t represent all the money spent on this project (as HGTV show budgets often don’t). A renovation or rebuild budget calculation should include construction costs as well as all the other related expenses you will incur, including permits, etc.
They hired cheap help to save money
Most people think one way to save money when renovating is by hiring inexpensive semi-professionals. This is not a good way to proceed. Renovations are complicated and require people with the appropriate education and experience. This is especially important considering the project is a home, typically a family’s largest investment and the place they rely on to rest and recharge and the end of each day, to function and work. The Parkdale family had done careful research into contractors, then hired a neighbour on a whim because he had a low hourly rate. This didn’t result in any savings, it actually cost them more. They had to fire him and hire another professional to repair the damage he caused, to the tune of $100K, they seem to suggest. Like all things in life, you get what you pay for and this is a common tale. Hire a real, experienced professional upfront and the outcome will be of a much higher quality. Using high quality professionals will save you time, money and energy correcting problems that might be created by these cheaper options, not to mention the headaches of finding a professional that is willing to clean-up another contractor’s mess.
Get a realistic handle on these projects
Thinking about a creative housing solution and want to know more about what the process might look like? We can help. We’ve been there.
Make sure you have a realistic handle on what these projects involve and how much they cost before you commit yourself to buying the fixer-upper. You don’t want to find out midway and be short on cash. Most of us don’t have wealthy godfathers to bail us out.