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Our Shocking Basement Renovation Bill

For the past year we’ve been slowly finishing the basement in our now three-year-old home.  At first we decided to take the pay-as-you-go approach and so we hired a contractor to frame the basement last July.

But six months later our project hadn’t progressed at all – it was difficult to line someone up to just do one stage at a time – so we decided to bite the bullet and get a quote from the same contractor to finish the basement in one shot.

Related: Our $35,000 basement renovation and why we paid someone else to do it

He quoted $35,000 to complete the basement – which he said would take roughly six weeks – and got started in late March.  We took out a home equity line of credit so that we could pay the initial and subsequent deposits as the project moved along.

Everything hummed along until Easter when one thing after another began to delay our renovation.  Flooring, cabinets, countertops – you name it, we had to wait for it.  We were already $25,000 in and I was starting to get concerned that the renovation would never be finished or that the final cost would come in at twice the original quote.

But after eight long months our project finally wrapped up on the weekend and now we have the basement we’ve been waiting for since we moved in.

Basement renovation

All that was left was the final bill and I was shocked when I was told it was only $7,500 – not the $10,000+ that I expected.  That’s right, our project actually came in under budget!

In The Wealthy Barber Returns, author David Chilton said the most expensive words in the English language are, “while we’re at it.”  He’s talking about home renovations and our tendency to take a simple project, like replacing the kitchen countertops, and add to it with new cabinets, appliances, and flooring “while we’re at it.”

Related: The Diderot Effect – The curse of upgrading your lifestyle

That’s how a $5,000 renovation can turn into a $25,000 renovation.  In our case, I was worried that our $35,000 renovation would turn into a $50,000 renovation as I hadn’t made a deposit since April and there was a lot more work to be done.

Fortunately, we got what we wanted and the contractor gave us a break because of how long the project took him to complete.

Final thoughts

Most experts say to take your renovation budget and add 10 percent for any extras or surprises that come along.  Lucky for us, the final bill came in nearly 10 percent less than the original quote – shocking, I know.

Related: Home renovations – do they pay off?

And since the project ended up taking so long we essentially ended up using the pay-as-you-go approach anyway and we’ll have the line of credit paid off sooner than expected.

So there you have it – a home renovation story that didn’t end up over budget or become an out of control nightmare.

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14 Comments

  1. Michelle on November 10, 2014 at 12:44 am

    Wow that’s awesome that it came in under budget. Definitely never heard of that happening 🙂
    Your basement looks amazing!

    • Echo on November 10, 2014 at 6:11 pm

      Thanks Michelle – we’re very happy with it!

  2. Dan @ Our Big Fat Wallet on November 10, 2014 at 6:26 am

    When I saw the title I thought for sure it was going to be a huge cost overrun. That’s great it came in under budget and it looks awesome. That will be a great place to watch Monday night football

    • Echo on November 10, 2014 at 6:12 pm

      Hey Dan, yes I thought I’d have a little fun with the title as we were actually shocked that it came in under budget. Can’t wait to watch some football down there!

  3. My Own Advisor on November 10, 2014 at 8:57 am

    That basement rocks 🙂
    Mark

    • Echo on November 10, 2014 at 6:13 pm

      Thanks Mark!

  4. Alicia on November 10, 2014 at 3:32 pm

    that basement looks awesome! I dream of renovating my basement someday, but I don’t want to pay $30k 🙂 do you mind me asking the size of the basement and the scope of that? Does that include your new-looking couch and TV? Was it plumbing for a bathroom and perhaps a wet bar?

    • Echo on November 10, 2014 at 6:19 pm

      Hi Alicia, thanks! The basement added about 900-square feet to the house with a living room, bathroom, and two-bedrooms. The project included electrical, plumbing, and drywall, as well as the fireplace, cabinets, counter-tops, and the rock work around the fireplace and above the wet bar.

      The couch and TV were purchased separately and we paid cash for those.

  5. Alan W. on November 10, 2014 at 6:08 pm

    I assume you were using a contractor who was not asking for cash discounts and used building permits too? Great news about the cost and yes it does look fabulous.

    • Echo on November 10, 2014 at 6:20 pm

      Hi Alan, thanks – and yes, everything was done on the up-and-up 🙂

  6. Tawcan on November 14, 2014 at 11:47 am

    That’s awesome that it came in under the budget. The basement looks great too. Now you have a man cave to use. 😀

  7. dunny on November 30, 2014 at 2:15 pm

    That is the most amazing bargain price for a major basement with bathroom — wow! In Vancouver, we have reached the point where older houses are worth little or nothing as they are considered tear downs. The lot values continue to increase. So houses with $250,000 renovations see no price increase at all on the improvements. Any renovations on my house would be pure lifestyle spending.

    Even without this market anomaly, any realtor I have ever spoken to agrees that renovations are never recouped unless you do the work yourself or there are other special circumstances. Staging works in my experience — gets a fast sale at a good price.

    That being said, I would love to renovate my house, especially the basement suite but it won’t get me any more rent. NTL I would like to add soundproofing, get rid of ancient furnace ducts, etc. I can’t decide.

    I am pretty happy with my situation here and as a retiree, I have a few options:
    – be happy with the house as it is, and just ride the market up. With rental income it costs me nothing to live here
    – spend some of my nest egg on improvements to enjoy the house more
    – sell and buy a condo with a view for cash. I wouldn’t release any free cash as I still have a mortgage and I wouldn’t have any rental income. I pine for a view, but I don’t like the hassles of condos, having owned and lived in a few, plus price appreciation is very limited in comparison. The house hassles are much preferable to me. I would also have condo fees, property taxes, etc. but no rental income to offset.
    – sell and rent an apartment with a view for the next 40 years. Scary given inflation in the past 40 years
    – rent the house and go and rent a place elsewhere (such as France or Mexico) and keep the option to come back here. Income tax implications on this one.

    I am always looking for stories about what others have done and what they would do differently.

  8. @WealthingRabbit on December 7, 2014 at 8:23 pm

    And I’m the guy who wrote: “There are only three absolutes in life: death, taxes and your home renovation project will not come in on budget.”

    Sometimes it’s nice to be proven wrong. Basement looks awesome and congrats on completing it under budget!

    Rob

    • Echo on December 8, 2014 at 7:50 am

      Thanks Rob! It’s nice to be the exception to the rule 🙂

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