Cost of renovating a house

12 minute read Published on May 2, 2023 by BrokerLink Communications

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Thinking about renovating your home? Doing so can have many benefits, but it can also be a major undertaking. Learn more about the pros and cons of renovating your home and how you can protect yourself during renovations with home insurance below.

What to consider before starting a home renovation

Before you decide to renovate your home, it is important to consider the following factors. This way, you can be sure that a home renovation makes sense for you:

Home renovation budget

Cost is one of the most important factors in any home renovation. Home renovation costs will vary from project to project, and will depend on several factors like the materials you want to use and whether you are doing a full house renovation or something smaller, like a bathroom renovation. Have a local contractor estimate the cost per square foot, which should include the combined cost of labour, supplies, and materials. We also recommend reaching out to an insurance broker to receive a free quote for renovations insurance or home construction site coverage, both of which you may need if you decide to go through with your home renovation plans. Ultimately, your budget compared to the estimated home renovation costs is likely the most important consideration when choosing whether to update your home.


Timing can also impact your decision to start a home renovation. If the renovation is major and requires you and your family to temporarily relocate, you might prefer to wait until a time of year when your children are out of school so they don’t risk being forced to change school districts. Also in relation to timing, if you know that you have a major expense coming up, like buying a new car or sending your eldest child off to college, it may be better to hold off on any home renovations. Given the high costs of many home renovations, waiting until things are more financially stable might make more sense.

The state of the real estate market

If you are renovating your home before selling in the hopes that your home renovations will drive up the sale price, then we recommend doing some in-depth research into the current real estate market. For instance, if the market is hot, a newly-renovated home could result in a serious return on your investment. However, if the market is cool, then renovating may not be worth the cost given the minimal amount of money you will make off of it. To identify the real estate market you’re in, contact a local realtor.

The pros and cons of home renovations

To renovate or not to renovate - that is the question. To help you determine whether home improvements are right for you, we outline the pros and cons below:

The pros of a home renovation

Consider the following pros of home renovations:

The value of your home may go up

One of the main benefits of renovating a home is that it could go up in value. Home renovations, especially certain updates like bathroom or kitchen renovations, can be a huge selling point for potential buyers. Whether you plan to sell your home in the immediate future or a little further down the road, a home renovation can go a long way in increasing the property value of your home. The end result could be a significantly higher purchase price, leaving you with more money in your pocket.

You can customize a home to meet your needs

Home improvements allow you to remodel your home in a way that better meets your needs. We all have personal tastes and preferences and a renovation, especially a full house renovation, allows you to create your dream home. You may also want to update your home in ways that make it more accessible if members of the household have limited mobility, or in ways that reduce your carbon footprint. For example, if you want to make your home more eco-friendly, you can choose to conduct green home renovations like upgrading your home’s insulation or installing solar panels on the roof. A home renovation is also a chance to make your home safer. You could take this opportunity to install smart locks, motion-sensor lights, or a burglar alarm system.

Home renovations may cost less than buying a new home

If you are debating between buying and moving into a new home or renovating your current home, a renovation could be the more cost-effective option. Generally speaking, it is cheaper to remodel a home than it is to buy a new one, especially when you take into account all the associated costs, like land transfer taxes, closing costs, moving expenses, and changing home insurance.

You may already have equity in your home

If your home is paid in full or you are working on paying down your mortgage your home will have equity, by doing home renovations you can increase the amount of equity you have in your home.

The cons of a home renovation

We outline the cons of home renovations below:

The unexpected costs that often accompany renovations

The reality is that the estimates home renovation contractors provide are just that - estimates. Things change along the way and costs often increase. From a mould discovery to structural changes or building codes, there are various unexpected costs that can add a significant amount of money to the overall home renovation cost.

Renovating comes with the possibility of delays

Contactors aren’t exactly known for being punctual. Therefore, it’s very possible that your home renovation project will take longer than your contractor initially estimates. This can be a major problem, especially if you are forced to relocate during the home renovation and are stuck living in a hotel or a rental home for longer than you planned.

You could end up living in a construction zone

If you choose to remain in your home during the home renovation, you should be prepared to live in a temporary construction zone. Construction workers traipsing through your home, dirt and dust on the floor, loud noises, and more. Some homeowners do not like this reality, therefore, it’s important to consider before starting a renovation - especially if the renovation is going to take more than a few days or weeks.

You are making a major financial investment, and it may not pay off

The reality is that renovations are investments, and they can be risky ones. You are likely investing a significant amount of capital into the project. Depending on the type of renovation and other factors outside of your control, like the local housing market, you may not see any return on investment for your renovation. You should be prepared for this reality. If the goal of your renovation is simply to make your home a more enjoyable place to live in for yourselves, then this possibility may not bother you. But if you are planning to renovate your home specifically to profit off of these renovations, then we recommend consulting with a realtor who can inform you about local market conditions and provide insight into the more lucrative types of home renovations. A realtor may also be able to suggest other ways of updating your home that can require minimal cost investment but can still potentially add value, such as repainting or improving curb appeal.

The cost of your home insurance policy could go up

Depending on the size of the renovations you make, your home insurance policy could be affected. For instance, you might need to add more third party liability insurance to your policy, especially if the value has increased. Luckily, if your home renovation results in increased insurance rates, a BrokerLink insurance advisor can give you tips on how to save on home insurance premiums.

Home renovation tips

Follow the tips below to ensure a smooth, hassle-free home renovation:

1. Set a realistic timeline

First, we recommend setting a realistic timeline before the renovation begins. This likely means accounting for a few additional weeks than what the contractor quotes. The reality is that home renovations often take longer than people think. Projects can face all kinds of setbacks, from materials being delayed in shipping to the contractor discovering mould or a pest infestation amidst the renovation. Be realistic about the timeline for your home renovation to avoid disappointment.

2. Update your home insurance accordingly

Most standard homeowners insurance policies do not cover losses or damages that occur during home renovations. Therefore, you will need to notify your insurance agent before the renovation begins to get the coverage you need. We recommend contacting your local broker to find out how you should update your current policy to cover you. For example, a broker may recommend raising your coverage limits during the renovation or adding a new type of home insurance coverage to your policy. Please note that updating your property insurance policy is important ahead of renovations of all sizes, from full house renovations to smaller bathroom updates. You may also need to adjust your home insurance policy after the home renovations are complete, as the value of your home may have changed.

3. Go into it assuming there will be some bumps in the road

Home renovation projects can be risky, so it’s best to go into it with the mindset that there will be some bumps in the road. After all, when a contractor provides you with an estimate, it’s likely based on a visual assessment of your home. They won’t know the full picture until they actually start tearing down walls or removing floors. In the midst of construction, it’s possible that your contractor will uncover something that needs tending to for your renovation to be completed. For example, they discover that your floors are uneven and will be unable to install your new hardwood floors after this issue has been resolved.

4. Don’t go with the first contractor you find

Anytime you’re buying something new or hiring someone for a job, we recommend shopping around first. Do your due diligence by interviewing multiple contractors before hiring one. Contractors vary in cost and availability, as well as experience. If you are looking to do a very niche or specific type of renovation, research contractors who have completed similar projects in the past. When speaking with contractors, make sure to request a quote and ask about their projected timeline, as well as their availability in the coming months (i.e. find out how soon they could start). It can be a good idea to ask if they are properly insured also, as this can weed out those who want to cut corners and are only out to make money. All of this will help you decide which one is right for you.

5. Start with a kitchen renovation

If you are interested in multiple home renovation projects, experts recommend starting with a kitchen renovation. Why? This is one of the most lucrative types of renovation projects. While requiring a larger amount of capital upfront, kitchen updates often result in the highest return on investment. In fact, some realtors estimate that homeowners can recoup nearly the entire cost of the kitchen renovation if they sell their home shortly thereafter. Please note that if you decide to renovate your kitchen, you will likely need to set up a temporary kitchen somewhere else in your home, so be prepared to do this.

6. Consider an addition

Creating an addition is another sound home renovation investment, so again, if you’re looking to make money off of your home reno, this might be the way to go. By turning an unfinished basement into a living suite, adding an extra bedroom, or creating an attic-bedroom conversion, adding extra living space is a great option. Not only can this increase your property value, but depending on the size of the addition, it might even be enough to rent out to a potential tenant, creating an additional stream of income.

7. Update old HVAC systems

If the HVAC systems in your home are nearing the end of their lives, consider updating them. Old HVAC systems can not only decrease the value of a home, but they can also lead to a rise in utility bills. New systems are far more energy-efficient and can be a major selling point. Doing these upgrades can also offer the potential for a discount on your home insurance premiums, as they are less likely to malfunction.

8. Improve accessibility

Another tip for renovating your home is to use it as an opportunity to improve accessibility. The more accessible your home is, the better it will be. Whether you intend to live there into your old age or you plan to sell your home, an accessible home can have many benefits. For, instance, if you plan to sell, certain accessibility features may make it more appealing to older buyers or those looking for a forever home. If you plan to stay in the home, then it makes it a more comfortable space to live in as you age and your mobility becomes increasingly limited. Types of renovations that may make your property more accessible include widening doorways and hallways or adding a shower or ramp to the main floor of your home.

Contact BrokerLink for more information on the costs of renovating a home

Still not sure whether renovating your home is right for you? It is a big undertaking, especially when you consider how much home renovations cost. A home insurance specialist at BrokerLink can help you decide whether renovating your home makes sense. They can make you aware of the pros and cons, especially those relating to cost, and can also give you tips on ways to ensure your home renovation goes off without a hitch. For instance, a BrokerLink insurance advisor may recommend that you purchase home renovation insurance or that you make a home inventory checklist before the renovation begins. Of course, once the renovation is complete, a BrokerLink insurance specialist can also help you update your current insurance policy. If you decide to sell your home, they can walk you through the process of changing house insurance policies. Get in touch with BrokerLink today to learn more about our vast array of property insurance services. You can reach us by phone, email, or in person at any of our Canadian locations.


FAQs on home renovations

How much do home renovations cost?

This depends on the scope of the renovation, the cost of the labour (e.g. how much money the construction company charges), and the cost of the materials needed to complete your project. To receive an estimate on the cost of your desired home renovation, contact a local contractor near you. They can offer insight into the going rate of various types of construction materials, as well as give you a quote on the cost of labour. Understanding the estimated cost of home renovations is crucial before beginning any project.

What home renovations are most likely to increase my home’s value?

The home renovations that most commonly add value to homes include kitchen and bathroom remodels, new windows, roof replacements, HVAC replacements, and garage door replacements.

Should I hire a professional contractor to complete my home renovation instead of doing it on my own?

Generally speaking, it is recommended that all homeowners without proper training or experience hire a professional contractor to complete their home renovations for them. This is especially true if your home renovation project includes any electrical or plumbing work, as these kinds of work can be dangerous for amateurs to attempt. Any renovation that involves construction work should also be left to the professionals. However, if you have some DIY home renovation experience, then more minor updates, like repairing, landscaping, or regrouting might be possible to do on your own.

Do home renovations increase property value?

Yes, in some cases, home renovations can increase the property value of your home. When you update your home, you make it more modern and likely more appealing to future buyers. For example, replacing old or outdated design choices with contemporary, energy-efficient ones can drastically raise the value of a home. That said, there is no guarantee of this, and other factors, like market conditions, can dictate whether a home renovation increases the value of a property.

Will an unfinished home renovation decrease the value of my home?

An unfinished home renovation can certainly diminish the value of a home. Given that the future buyer will likely have to pay to complete the renovation,, they are unlikely to make an offer that is nearly as high as if the renovation had been completed. Even if the buyer decides not to go through with the renovation, and instead has the home revert back to its original state, this will still cost them money. Therefore, real estate professionals recommend completing all renovation projects before selling. A turnkey home is much more likely to garner a higher sale price.

Is a home renovation worth it if I plan to sell my home after?

The answer to this question depends on several factors. Such factors include the state of the real estate market and the condition of your home. If your home is old, outdated, or in a state of disrepair, home improvements may be necessary before selling. However, if your home is in decent shape and the market recently cooled off, then home renovations may not add much value to your home. Oppositely, if the market is hot, then home renovations could lead to a major return on your investment if chosen wisely. To gain further insight into whether a home renovation is worth it before selling, we recommend consulting with an experienced realtor in your area.

If you have any questions, contact one of our local branches.