Why renovating is so much more expensive than building from scratch

Renovations seen to be the hobby that lots of people have settled on now that they are home all the time. It makes sense really you have the time to manage the job, home values are soaring and if you’re lucky enough to have extra pandemic cash, why not? People are often flabbergasted at the final bill though. After all how can it be more expensive than building something from scratch? While it can be let me tell you! When you think about it a bit more deeply you’ll see why! Especially if you’re hiring someone renovations can cost a lot more than you might think and if you do it yourself it could take a very, very long time. These are the main reasons why.

It’s not usually hidden problems

All those shows on HGTV give you the impression that the very moment that sludge hammer enters the wall a major hidden issue is always revealed. That’s not usually the case though. Most times there is a surprise in there somewhere but it doesn’t usually directly add a lot to the final bill. We almost never open a wall and realize that the house is about to fall down more often it’s some insulation that’s lacking, missing vapor barrier or hidden junction boxes. So if you have the idea that as long as there are no huge surprises it should be the same cost as a fresh build, that’s probably not true. Little things like flipping a central vac to a different wall can mean two hours of driving to a specialist store, and drywall and paint over three days. If the number to build is $150 a square foot (I would argue it’s not anymore) expect to pay significantly more to gut a space and start over.

Extra (longer) demolition step

And that demolition is way more complex. If we are tearing down a house and putting it in dumpsters we will cut off the power, drain anything that needs to be drained, usually call in an excavator and tell the dumpster company to keep sending empties until we tell them to stop. We can usually get rid of a house in a day or two. Even if we do it by hand we buy all the reciprocating saw blades and start cutting out big chunks. Also you get to use a sludge hammer which usually doesn’t happen all that much in a renovation.

When we do demolition for a renovation it’s totally different. Mostly in that it is very slow. We do things like cut perfectly straight lines where new drywall will meet old, we have to carry everything out through the house and we can’t just rip out old plumbing that has to be capped everywhere we cut. We would never chip out all the tile in a room and clean the subfloor for a full demolition for example. We also try to keep it neat since you will be living in the home. This sort of demolition is accurately described as painstaking and therefore way more expensive!

No flexibility in what to do next

When we’re building a house from scratch there is rarely only one thing going on at a time. That doesn’t mean that everything is going on all at once. But someone might be working on siding while someone insulates. If you run out of batts you can move on to spraying the windows. If you’re waiting for more siding drywall can go in. Since each job is so big most go on for multiple days or even a few weeks depending on the job. There’s even lots of space for everyone to work at the same time. Even if the goal of the week is to prime the walls finish paint is usually on site too. In other words we’re always preparing for next steps as we work and those steps are predictable. This means that there is little to no down time on the job. No matter who has nothing to do there is always something that everyone can do. During a renovation there is more fine skill required for most of the tasks so there can be more down time on the job overall. We do our best to plan for that but it is just part of the process. Things in a renovation have to proceed in a very specific order especially at certain stages. That means that other stuff can’t proceed for a while which is way less efficient and costs a lot more.

What you need isn’t predictable

When we install something in a new build we know exactly what we need and how much of it. It’s a simple calculation for insulation, vapor barrier and drywall. Maybe a little less clear cut for mud and paint though. In the morning if not before we go get (or get delivered) exactly what we need. Even that tends to be more efficient. Need drywall for a whole house, while that’s just a phone call and a boom truck shows up and puts exactly what you need on each floor. During a renovation you might think you can save the ceiling so only buy what you need for the walls. Then it turns out you can’t so that’s another trip to the store. Since you’re only getting a few sheets that’s two trips for someone on site. During a new build you also have a lot more flexibility in the materials you use. If one subfloor thickness is sold out you just go up a size during a renovation the floor levels absolutely have to match so you might end up spending half a day tracking something very specific down. This kind of thing happens over and over during a project too and that lead to more time overall.

Beware the ‘while you’re here’ extras

I get it and we often take this as a bit of a compliment really. You finally have someone in your house with ALL of the skills that you trust it’s oh so tempting to just say ‘while you’re here’. Sometimes if we see an issue that’s easily fixed (like all the doors in a hallway don’t close properly) we’ll offer to fix it. But those extras usually have a material cost and obviously a time cost. I think some homeowners really do think these things are free until they get the bill or maybe that they should be bonuses? Think about it though, whether you work by the hour or on salary if you had to do way more stuff at your job and maybe pay out of pocket to do it,Alonst would you? Absolutely we will probably tackle that honey do list for you but it will come at a cost.

More labour hours

You might be noticing a trend here and that is lots and lots of extra time. More time in demolition, more time shopping and more down time. In some ways the smaller the project the less efficiently time is used. We can usually get very close to new build efficiency on a main floor gut but no where near that on a main bath re-design. This can add up to a lot and certain things you think will save you money might get eaten up in labour costs. Recently we reinstalled a gorgeous clawfoot acrylic tub in a new bathroom. We had a time tracking down the right size chrome pipe and reinstalling the drain in the new floor plus moving the tub twice. In this case it was the right choice because it was a beautiful high end tub but had it been fairly basic installing a new tub might have been a cheaper choice. If something isn’t high end or very sentimental it’s often better to just replace it plus you end up with a brand new thing!

At some point just tear it down

In this market especially it’s hard to tell someone who has shelled out hundreds of thousands of dollars that they would be better off to pay to tear what they bought down. But it happens. In our experience most homeowners take this as a big insult at first and then agree by the middle of the job. By then it’s too late. We don’t tell people this lightly even if we do use humor to cushion the blow. If someone tells you two days in ‘what this place needs is gasoline, an alibi and a match’ you would do well to consider it. Of course get another opinion but it might well be in your own best interest to listen. To be honest it’s in our best interest if you don’t. Also think about it, if you were going to spend as much, or almost as much, or even more to renovate a building would this structure be what you build? 

As much as people point out that homes aren’t built like they used to be renovation usually requires compromise. You’ll hear people say that this one’s made of REAL 2x4s and that’s true but now we build out of 2×6 and insulate them properly. Think about it they didn’t even have building codes back then and the older it is the more bandaids it has on it. Take that into account when deciding whether or not to cut your losses and tear down.

Renovating is a very expensive process and a very expensive hobby to have. You probably will have to make compromises along the way. Unfortunately it is occasionally part of owning a home. My advice is to get the maximum out of your renovation budget by sprucing up what you already have if it still works well. When you do decide to renovate opt for timeless styles over trendy options which may look dated more quickly. Also it’s a good idea not to get your heart set on one option at the very start. Be willing to work with the structure that is already there. What’s your favorite renovation you’ve done so far? Any tips for keeping in budget like these? Leave it in the comments below!