8 Costs to Consider When Buying and Renovating to Sell

Renovating a home to sell—buying a fixer-upper, putting in your own sweat equity to fix it up and then selling it (hopefully for a profit)—can seem like a good idea. It always looks so easy on TV!

However, in addition to the construction and material costs needed to makeover the property, there’s a long list of other fees to consider before keys are handed to new owners.

Invest in insurance

In the eight years since Heather has been flipping houses, she’s learned about savvy budgeting.  

“There are lots of associated costs people don’t count on when they’re thinking they can flip a house by putting $20,000 into it,” she says. “For me, one of the big reality checks was insurance: when we’re flipping a house [in Winnipeg], having the proper liability insurance runs about $2,000 for three months

Lump in legal fees and land titles

Heather budgets about $1,000 in Lawyers fees  to buy the property and $1,000 to sell it. That figure varies depending on where you live and the complexities of the purchase or sale. So does the land transfer fee, which is usually calculated on the purchase price of the home.

Carrying costs can cost big money

When looking to purchase a property or investment, many Canadians need to do so with the help of financing.

Factor in time and money for inspections

 Typically during a renovation project, you need sign off from Local Inspectors  at key stages (like before closing in walls or adding flooring), notes Nathan. If you don’t get sign-off, delays or adjustments can strain your budget

Utilities and property taxes are on you

Keep in mind that while you’re renovating, you’ll also be paying for heat, water, electricity, and Property taxes.

Don’t forget disposal and cleaning costs

“For most of our flips, we assume we’ll use two or three dumpsters, but for our last hoarder house, we had six dumpsters,” says Nathan.

Calculate a contingency fee

“In season one of the show, there was so much stuff in the house when we bought it that we didn’t realize one whole wall of the garage was missing,” recalls Heather. “It was completely rotted out, which we didn’t see because it was stacked to the ceiling with boxes. We had to rebuild that whole garage.”

Once you start a renovation, you never know what you’ll uncover. Nathan adds they set aside about 15% of their renovation budget for unexpected problems.