Here we are again!

I’m back with 5 helpful tips that you can use on your next renovation.

You read that right, another 5 ways for you to increase your return on investment by reducing your renovation costs.

If haven’t read my blog titled How To Make Money on an Investment Property I highly suggest you do. After reading it you’ll know how to accurately calculate your 1st year return on investment. I also breakdown my “FOUR PILLARS” which include: Cash flow, Principal Pay down, Market Appreciation, and Forced Appreciation. If you understand what Forced Appreciation is after reading then you’ll know just how helpful these renovation saving tips are in maximizing your return on investment.

Its feeling like déjà vu around here with another 5 great tips; let’s get right into it! 

1. Be your own Project Manager
Project managing could reduce your renovation costs by 20% or more. You’ll see immediate returns by not hiring a General Contractor; eliminating their employees’ hours, the markup added to their subcontractors’ costs and their own markup fees.

However, be prepared to put in the work and assume all responsibilities and liabilities for the renovation. If you don’t have the knowledge or the capability to take on this role it could end up costing you more in mistakes. If you can pull it off though, that’s money in the bank.

2. Self-perform work
How much of the work can you do yourself? It’s a question that every avid DIYer asks themselves. By self-performing some specific tasks during the renovation you’ll save on your renovation costs. If you have the confidence and skills necessary, do some light demolition, paint, or install LVT flooring.

Maybe take on these tasks in the evenings or during a weekend. It will help save you money and expedite the renovation schedule. Another option is to purchase the finish materials and fixtures yourself and coordinate timely deliveries for the work on site. Any of these suggestions will keep more money in your pocket. Decide what works best for your personal circumstances.

3. Reuse materials
Kitchens and bathrooms are widely regarded as the rooms of choice to spend the majority of your renovation budget. They are in line with curb appeal for making the strongest impression on homebuyers and tenants, but the amount of money you can end up spending on them is endless.

By keeping the existing kitchen layout, painting the cabinets, refinishing the countertops, and adding new hardware you can significantly reduce your renovation costs. Take this same approach with the bathroom cabinets/counters. Instead of replacing the sink and bathtub, have them re-glazed. They even have specialized products to paint over the existing tile.

Simplify your approach and prolong the lifespan of materials until replacing them cannot be avoided. It is an approach that could save you thousands on your next renovation.

4. Optimize the floor plan
Maximizing your existing layout, while minimizing expenses is how you save money during a renovation. Consider when estimating your budget whether major changes to the existing layout are actually worth spending that money on. Prudent planning could mean the difference between a very expensive renovation or a moderate one. Here are a few examples:

• Moving critical structural components like a structural I-beam for the sake of a design may not make the most financial sense if you can plan your design around it instead.

• Relocating an existing furnace is quite the task and it typically requires a permit which means an engineer is getting involved. Comparatively, moving an existing hot water tank is not as difficult. Try to keep the furnace room where it is and plan around it whenever possible.

• Try to layout your rooms based on the location of existing windows. There may be no getting around increasing the size of existing windows or adding new windows to comply with the Ontario Building Code. It’s worth a try though.

Instead of moving major components, build your design around them. It’s much simpler to add new underground plumbing and electrical wiring than redesigning your structural supports or hiring a mechanical engineer to redesign the HVAC system.

Use these tips and envision the final layout. Maximize the existing space to minimize unnecessary expenses. Having a solid plan before starting any project is the best way to avoid costly mistakes down the road.

5. Receive competitive bids
If you decide to only get a single quote, you wouldn’t have any way of knowing whether you got a good price or were taken advantage of. Establish a competitive market to get the best possible pricing. You can do this in several ways:

• In commercial construction it is common to have all of the contractors or subcontractors participate in a single walkthrough. It’s a much more efficient use of your time, but not something you see too often in the residential space. Alternatively, schedule all contractor walkthroughs back to back, so they see who’s coming and going.

• Get a minimum of 3 quotes for every renovation project, and tell each contractor to sharpen their pencils because you’re requesting pricing from competitors.

For the more experienced investor, working with a design professional like Infinite Design Services who can prepare a detailed budget estimate will give you accurate costs before ever receiving a contractor quote. 

Maybe someone skimped on materials, or someone missed a critical scope of work because they misinterpreted something on the drawings. When you’re satisfied and have chosen the top bid, you’ll know that you received a competitive price.

There you have it ladies and gentlemen; my 5 ways to reduce the cost of your next renovation project! But before I bid you adieu, how would you like one extra way to save on your next renovation?

Enjoy my BONUS tip:

6. Negotiate
You may salivate at the thought of negotiating a lower price, or you may be very timid about negotiating and causing conflict, but if your goal is to save money it’s something that you must do. The art of negotiation is an entire subject that I’m not about to cover here. All I can really say is that you have nothing to lose by asking either a contractor or supplier for a reduced price.

Here are two examples:

• Tell the contractor that you received a lower price, and you want to know if they can you match it? Maybe you did receive a lower price, and maybe you didn’t.

• Speak to a supplier’s sales representative or manager. Tell them you will be ordering “x” amount of material and want to know if they can sell it to you at a discount. Some stores offer Contractor programs where you can register and receive discounts off retail pricing.

I’ve never in my life had a contractor or supplier raise their price because I asked for a discount.

The worst possible response you’ll receive is “No”, so why not ask the question? You’ll be glad you did.

Now I bid you Adieu!