What You Really Need to Know Before Buying a Fixer-Upper in Toronto
1. Don’t Skip the Home Inspection
Purpose: The home inspection helps uncover any major issues in the home, such as foundation problems, plumbing leaks, roof damage, or electrical hazards. These issues may not be visible at first glance but can be costly to repair.
Action: Hire a licensed, experienced home inspector familiar with Toronto’s older housing stock. In Toronto, homes built in the early 20th century or earlier might have hidden issues like knob-and-tube wiring or lead pipes, so it’s essential to get a thorough inspection.
3. Estimate Renovation Costs
Purpose: Accurately estimating the renovation costs ensures that you are financially prepared for the project and helps prevent underbudgeting. Knowing the costs upfront will allow you to plan appropriately and avoid surprises later.
Action: Ask your contractor for a detailed cost breakdown, including labor, materials, and potential hidden costs. Toronto’s competitive construction market often results in higher-than-expected costs, so be sure to budget for contingencies. Getting quotes from multiple contractors is advisable.
2. Consult A Contractor
Purpose: Contractors provide insight into what’s realistically possible with the home and whether the renovations you envision are feasible. They’ll help you understand the scope of work and potential challenges involved in updating the property.
Action: ring in a licensed contractor with experience in Toronto’s specific building codes and the potential challenges of renovating older homes. They’ll help you understand what’s achievable and what may need to be adjusted based on Toronto’s regulations, especially if the home is in a heritage district.
4. Check Permits and Zoning Laws
Purpose: Certain renovations require permits to ensure they meet building codes and safety standards. Failing to secure permits can result in fines, forced removal of unapproved work, or problems when you sell the house.
Action: Research the zoning bylaws for the specific neighborhood and check with the Toronto Building Department about any required permits. Be aware that if you’re renovating a heritage property, additional approval may be required, and certain alterations may be prohibited. Work with your contractor or an architect familiar with Toronto’s building codes.
5. Determine Financing Options:
Purpose: Financing a fixer-upper is different from buying a move-in ready home because you need to account for both the purchase price and the cost of repairs. Choosing the right financing option can make a big difference in your long-term budget.
Action: Look into renovation loan options like an FHA 203(k) loan, which allows you to finance the cost of repairs in your mortgage, or consider a home equity loan if you already own a home. You might also consider traditional mortgages or personal loans depending on your situation.
6. Budget for Unexpected Expenses
Purpose: Renovations often come with unforeseen problems, such as hidden water damage, outdated wiring, or structural issues. Having a contingency budget ensures that you’re not financially strained if unexpected repairs are needed.
Action: Allocate 15-20% of your renovation budget for unexpected expenses. In Toronto’s fast-moving market, material costs and labor prices can fluctuate, so having a contingency fund will help cover any surprises.
7. Consider Resale Value
Purpose: The goal of a fixer-upper is to increase the home’s value. In Toronto’s fluctuating real estate market, certain types of renovations can provide a higher return on investment than others.
Action: Work with a local real estate agent to understand which renovations will give the best return in Toronto’s market. If you’re renovating in an up-and-coming neighborhood or near major infrastructure projects (like new subway lines), these factors can increase the potential resale value.
8. Plan a Timeline
Purpose: Renovations can take longer than expected, especially in a busy market like Toronto. Finding available contractors during peak renovation seasons (spring and summer) can cause delays. Also, the permit process can take time, especially for large-scale projects.
Action: Develop a realistic renovation timeline with your contractor, and factor in delays from permit approvals, contractor availability, and unexpected problems. In Toronto, timelines can be extended due to weather or construction backlogs, so it’s essential to remain flexible.
9. Finalize Your Offer
Purpose: With all the information from the inspection, contractor estimates, and budget, you’re now in a strong position to make a well-informed offer. Toronto’s competitive market means you’ll need to factor in renovation costs and negotiate accordingly.
Action: Use the information gathered to make a fair and informed offer on the property. If the home requires significant work, you might be able to negotiate a lower price to reflect the renovation costs or request that the seller address certain issues before closing. A local real estate agent can be invaluable in helping you navigate competitive bidding situations in Toronto.
10. Manage the Renovation Process and Stay Informed
Purpose: Renovations often require ongoing oversight to ensure the work is progressing as planned, staying within budget, and meeting your expectations. It’s crucial to remain involved throughout the process to avoid costly mistakes or delays.
Action: Regularly check in with your contractor to ensure the renovation is progressing as expected. This includes confirming that the work aligns with the timeline and budget, and that all necessary inspections are being completed. In Toronto, keep in mind that permits may require inspections at different stages of the work. Additionally, if the work involves significant changes, you may need to update permits or notify the city of any structural modifications. This step will help you manage any unexpected delays or costs and ensure the final product is what you envisioned.
Project Estimate Costs
Kitchen renovation: $15,000–$60,000+
Bathroom remodel: $15,000–$30,000
Flooring: $5–$15 per sq. ft.
Roof replacement: $6,000–$20,000+ depending on size, pitch, and materials
Electrical upgrade: $5,000–$25,000 (including knob-and-tube removal)
Plumbing replacement: $15,000–$30,000 for a full system
HVAC system: $12,000–$20,000 for new furnace and A/C
Foundation repairs: $20,000–$40,000+ for significant structural work
Waterproofing (exterior): $80–$150 per linear foot
Fence installation: $40–$100 per linear foot depending on material and design
Window replacement: $800–$1,500 per window including installation
Removing a structural wall: $5,000–$15,000 depending on scope, permits, and beam size
Full gut renovation: $150–$300 per sq. ft.
Asbestos or lead paint removal: $2,000–$15,000 depending on extent
Masonry or brick repointing: $25–$50 per sq. ft.
Insulation upgrade (walls/attic): $2,500–$10,000+
Permits and drawings (structural work): $2,000–$8,000+
Driveway replacement (asphalt or concrete): $5,000–$15,000
Landscaping and grading: $3,000–$20,000+
Basement underpinning (for height): $80–$150 per sq. ft.
New deck installation: $6,000–$20,000+ depending on size and material
Drywall replacement or patching: $2–$5 per sq. ft.
Paint (whole house): $8,000–$15,000 depending on size and prep needed
Always set aside an extra 15–20% for unexpected costs.