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Buying a Second Home – Where Do I Start?

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You’ve already been through the process once and bought your first home. But now your mortgage is up for renewal or you’ve outgrown your house or for any other number of reasons, you’ve decided it’s time to move onto your next house. Because you’ve done it before, you know how the process works. But there are some things that you should consider with your second house that you didn’t need to with your first.

Budget vs Pre-Approval – yes there can be a difference

Buying your second house, generally means you will be spending more than you did on your first. So one of the first things you should do, like with any big purchase, is figure out your budget – what you can actually afford to spend. Yes, you will get pre-approved for a mortgage to find out how much money your lender is willing to give you, but there can be a HUGE difference between this amount and what you can afford to spend. Before you even think about contacting a realtor, you should sit down and look at your budget to see how much extra you can afford and what that extra amount going towards your mortgage could mean for the rest of your budget. It may mean that you will have less money to go on vacations or you need to reduce your discretionary spending. Talking to your financial advisor is another great way to figure out how much extra mortgage you can personally afford.

Stick to your budget – don’t even see the carrot

Once you figure out what you can afford, you need to make sure your realtor knows that amount and sticks to it. It’s so easy to fall in love with the 3,000 sq ft open concept house with the huge restaurant style kitchen with granite countertops, stainless steel appliances, dual temperature wine fridge, four bedrooms, finished basement, etc. You may even begin bargaining with yourself to justify the  price tag that is $50,000 above what you can afford. The easy solution? Make sure your realtor knows that you do not want to see anything above your budget. On a side note, if anyone is selling a house like I just described, please let me know…

Figure out what you need  – what does your dream home have?

You’ve learned a lot, and maybe sacrificed a few things, with your first house and those learnings will really help you figure out what you need for this new house. Maybe it’s more space, more bedrooms, a garage (attached or unattached), walk-in closets, a breakfast nook, office, multiple bathrooms, a bonus room, a finished basement, etc. The list of options is endless for things you could want in a new house, but you need to really decide what your non-negotiables are. Maybe you need a separate bedroom for each of your two kids and you also want to have a guest room for family that comes to visit and you need an office space because you work from home, plus your master bedroom. So you need a 5 bedroom house. You don’t want guests having to walk all the way upstairs to use the bathroom, so you need a main floor bathroom. If you live in Saskatchewan, you probably need a garage.

The clearer you can be on what you need in a house, the easier it will be for your realtor to find you the perfect one.

Settling vs Compromising – it’s all a matter of perspective

We all want that diamond in the rough – the perfect house with everything on our wish list that is below budget. But very few of us will actually get it right off the bat. The key is in shifting your perspective. Maybe that means getting an older house for a lower amount that with a bit of work can become your dream home? Perhaps it means getting a bit less square footage so that you can get the big backyard? Maybe it’s considering moving out of your desired neighbourhood? None of these things need to be considered as settling because it’s all about compromising and deciding what’s most important for you.

Ready to start looking?

  1. Make a list of things you find yourself saying “I wish I had…” in your current house.
  2. Check out current listings in your area to see what’s available and what you do and don’t like.
  3. Try out a mortgage calculator, like this one, to see what different mortgage amounts would mean for monthly payments.
  4. Talk to your financial advisor for help figuring out what you can afford

Good luck in your home search!

Basement Renovations: The Expected/Unexpected Costs

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If you’ve been watching a lot of HGTV during the pandemic and have been mapping out your home renovation, this blog will go through the expected and unexpected costs of getting the job done so you can start hammering down your renovations budget. 

When we moved into our house, like many people, there was an unfinished basement. And like many people, we had a plan to eventually finish it but instead it became a bit of a dumping ground for everything that didn’t fit anywhere else. We’d talk about how great it would be for everything to have a place but we just didn’t have the time to commit to it.

Fast forward a couple of years and we decided it was time. My husband had a break in work which meant he was home and we were in a pandemic so time wasn’t an excuse anymore. Also, with the new Home Renovation Tax Credit announced by the Saskatchewan Government, we would be able to save money. We had talked about hiring someone to come in, but we didn’t think it was too big of a job and we were up for the challenge! Plus, I’d seen lots of friends posting their reno pics and I was inspired to take on my own home project.

We decided on a floor plan, bought the lumber, purchased tools (that I still maintain we don’t need), grabbed the insulation and got to work!

The Physical Costs

What about the permit?

You may be asking yourself, “Didn’t you forget a step? Don’t you need a permit for a renovation like that?” Yes, you are correct, we did need a permit and more importantly, it was the first thing we did after deciding on our floor plan. As part of the permit application, we had to submit the floor plan to make sure that it passed building code and there wasn’t anything we had done wrong. I know this is one of those topics that a lot of people have an opinion on and I’m not going to judge people for whether or not they choose to get a permit, however, if you don’t get one and an inspector drives past your house and notices renos are happening without a permit, you can be fined. Plus, if you ever want to sell your house, you’re going to want to make sure you have gotten all the necessary permits to prevent any issues. If you are looking to do renos at all, including building a deck, check in with your city or rural municipality office, most can be found online like for Regina.

Don’t forget that there is a cost to the permit that is based on the square footage of the space and there will be a slight increase to your property taxes. However, there is also an increase to your property value!

Amateur vs Professional

Although we decided to finish the basement ourselves to save money, there are some things that had to be done by a professional. Because we are in an attached townhouse and share a wall with our neighbours, we had to have an electrician come in and do all of the electrical work and pull that part of the permit. This was a cost we hadn’t budgeted for and cost over $3,000 (thank goodness for tax returns). To be honest, I definitely feel more comfortable having a professional do the electrical work because there is history in my family of amateur electrical work that ended in a bathroom fan switch turning on a closet light in another room.

Materials

One thing I learned is that there are some materials that are necessary to the project and you just can’t get away from and there are other materials that are “necessary” to your husband. Lumber, insulation, drywall, nails, screws, mud, tape, sand paper, primer, paint, paint supplies, flooring, lights – all things that are absolutely necessary. A new drill, an air nailer, a new TV and some other tools I don’t even remember the names of – nice to haves that you may have to convince your building partner out of. Right now, lumber prices are higher than normal and that’s not something you can get away from. For us, the following tips helped us to stay within budget:

  1. Research what materials cost with a quick trip to your local hardware store.
  2. Talk to the professionals working at the hardware store. I was on a first name basis with quite a few people at Lowe’s. They can help advise how much product you will actually need.
  3. Build your budget once you know how much the materials cost. Remember to add in a bit of extra room for when you inevitably break pieces of drywall or dump an entire bucket of mud.
  4. Borrow tools from friends or family rather than buying for one project.
  5. Buy things in bulk and on sale when possible.

The Mental Costs

It will take time

Unlike what I was led to believe from home reno shows on HGTV, it does not take a week or two to finish an entire basement – well not without an entire team of professionals anyway. I knew it would take time, but didn’t expect to be sitting here almost a year later and just be painting. At first we had talked about it being done for Christmas 2020, and now our goal is fall 2021. My one bit of advice on this is to be realistic in your timelines, especially when working full-time. It can feel a bit disappointing to not have it done, but it’s so important to celebrate the wins from each stage!

There will be dust

One of the things I didn’t realize, was how much dust is involved in renovating. Between the sawdust from framing, the drywall dust, and the sanding there was dust everywhere. I was sweeping, vacuuming and washing the basement floor often at first, but it became an exercise in futility as there was so much dust in the air that would fall over night that it was so overwhelming. I accepted that it was a construction zone and I’d do what I could and do a big clean at the end.

Almost done

Within the next week we should have all the painting and flooring done so I can move things downstairs and get the basement set up and I absolutely can’t wait. While the physical costs, money and body aches, were more than I expected, it was the mental costs of living in a construction zone I was completely taken surprise by. But nothing will compare to being able to go downstairs and feel so much pride that we did it ourselves.

Will I do it again? Maybe on a much smaller scale like a painting a wall, but doubtful we’ll tackle an entire floor of a house. I don’t have much experience with DIYing and I want to give so much credit and kudos to people who do it often – it’s exhausting!