This report can will you get an insight into some of the factors that make renovating so costly. There’s no doubt it about, renovating can be expensive. But in many cases it’s a better alternative to moving. 

1. Labour saving equipment is often difficult to use due to the physical limitations of many renovations. In those cases that means that only hand operated equipment can be used. Think of excavating a basement by hand using a conveyor belt or wheel barrel to remove the dirt. Time consuming and very costly!

2.  Accessibility for excavation equipment is often limited. The size of equipment used is smaller taking more time - and time is money.

3.  In many renovations the distances required to move excavated materials add costs.  Most additions take place at the rear of the house. 

4.  Renovations often involve removing interior or exterior load bearing structural walls. This creates the need for shoring and bracing to hold up the building while structural changes are being made. 

5.  In renovations material handling becomes more costly. Moving concrete by wheel barrel instead of pump truck, lumber by hand instead of by forklift or carrying drywall into the house by hand instead of by boom truck are all time consuming. 

6.  Both on the interior and exterior of the house there is a large amount of cutting and patching and attempting to match the existing conditions. In many cases this gets so costly that it's more economical to remove entire walls rather than create many new door and window openings. This sort of trade-off has to be carefully analyzed. 

7.  The cost to protect completed work can be significant since the "normal" sequence of new construction usually cannot be followed. 

8.  There are none of the economies of scale usually associated with new construction. In renovating very often small quantities are required. This increases both material and labour unit costs. 

For example the stucco unit cost (per square foot) for 100 square feet is higher than for 2500 square feet. The same holds true for many other material per unit costs (flooring, concrete, mouldings etc..). 

9.  Very often with only small work areas available at a given time, job scheduling between trades becomes difficult and subcontractor quotations may reflect the excessive start-up and shut-down phases of the job. 

10.  Dust protection to adjoining non-construction areas can involve substantial special protection and alter usual construction methods. 

11.  Renovations can experience delays due to unexpected conditions discovered during demolition or removal. These delays ultimately increase construction costs. 

12.  Plumbing piping and heating/cooling ductwork runs can be difficult to access. Electrical wiring may have to be snaked through finished walls and floors. 

13.  Matching "existing conditions" can be difficult because materials may no longer be manufactured. Substitutions can expensive. 

14.  Weather protection of existing structure often require additional temporary structures. 

15.  On small projects its often necessary to pay a tradesman for a minimum of four hours for a task that is completed in one hour.

A HOMEOWNER PROTECTION PLAN

Very often homeowners leave themselves open to financial risk when they don't obtain adequate protection during and after a home renovation.

You should review the following in detail with your renovator prior to signing a contract.

1. Holdbacks and Liens: Who is responsible to administer the holdbacks? What happens if a contractor, subcontractor or supplier places a lien on your propert?                                      
2. Commencement of construction and delays in completion: What happens if the project is delayed in getting started? What happens if the project is delayed in completion? What are the penalties for delays?                            
3. Insurance: General liability, loss and damage to property, personal injury: What type of insurance coverage is being provided by the renovator? What type of coverage are you required to provide?  Are you and your assets adequately protected?                                      
4. Changes and extras: What happens with changes and extras? How are they billed. and when are they paid for?                                       
5. Warranty: What type of warranty are you getting and how long are you covered?                                      
6. Payment: When are payments made, what control do you have over cash flow on your project?