Mortgage 101 – Halifax Home Renovations with Dan Monk

This segment Clinton and Todd bring on contractor and civil engineer, Dan Monk, to chat about home renovation costs and trends in Halifax, some red and green flags to look out for when hiring contractors, and some simple renovations or improvements you can make to help you love your home.

Hiring contractors, renovations costs and importance of insurance

Todd Veinotte
And because we love our home so much. We’re going to talk to a contractor!

Clinton Wilkins
Yeah, we are, we’re gonna get Dan Monk here on the line. I think that we have him on. Dan, are you with us?

Dan Monk
Yes, I am. How you doing?

Todd Veinotte
We’re doing well, Dan, by way of introduction, why don’t you let everybody know what you’re all about?

Dan Monk
Oh, gosh. My name is Dan monk, owner of Monk Renovations, and we focus on residential renovations here in the Halifax area.

Todd Veinotte
Yeah, and you you’ve got some what I would say qualifications and credentials that have gone above and beyond what most contractors have, not to put you above the rest. But you’re an engineer. You’re a red seal Carpenter, and you take the job very seriously. Obviously, you guys can get it done.

Dan Monk
Yeah, there’s not much we can’t take on Todd. Thanks for introducing the credentials. Yeah, I’m a bit of a rare breed. Not too many civil engineers out there who are also red seal carpenters. So, one side of my collar is blue, and the other side is white.

Clinton Wilkins
Got it. Love it. Now, now, Dan, as you know, February is the month of love. And you know, we talk about buying homes, we talk about selling homes. We talk about mortgage financing here on our show. But there’s so many existing homeowners that just don’t love their home for one reason or another. We’d love to hear from you like what are some of the trends and renovations right now? And that, people can do to start loving their home.

Dan Monk
Oh gosh, when you talk about loving your home. Number one, and number two is bathrooms and kitchens. They are the most utilized parts of the home. Everybody knows of the maritime kitchen parties and the social life that surrounds the kitchen in Nova Scotia. While they do get railroad as well for all that activity and busy families. Same with the bathrooms. You know, they’re a high traffic high moisture area, and they they get wore out, they get dated. And those are number one and number two most popular renovations. But on another note, what has been happening with the housing crisis is in Halifax and across the country. We’ve been noticing a lot more people starting to look at underutilized spaces like bath, basement renovations to create other rental units or in-law suites for either adult children who are choosing to live at home maybe save some money to save up for a home of their own. Or, maybe it’s elderly parents who are moving in with their children for safety and security.

Todd Veinotte
What type of… when we’re talking, the price of everything’s gone up, down, gone through the roof exponentially the prices of construction goods… how is it putting renovations together within a budget with all of that considered?

Dan Monk
Oh, gosh, you hit the nail on the head pre pandemic, when we were talking about prices, I can honestly say that prices on an average renovation, from three years ago, have gone up by probably 30 to 50%. Wow, that’s a significant jump. And some of it has to do with labor. Labor rates have gone up, you know, we’re in a labor shortage situation. So labor rates are up probably by at least 30% or more. The second thing is materials. Yes, they went up quite drastically during the pandemic. And they did come down and a lot of things have come down. But they didn’t come down to where they were before. We’re still seeing prices on things like tubs and faucets and fixtures and, and even your regular building products that are 25 to 50. And sometimes 100% higher than what they were for the pandemic only three years ago. So, that all adds up to that, you know, 30 to 50% increase.

Todd Veinotte
Dan, is there any reason to think that those numbers might come down at all? Are they here to stay?

Dan Monk
If I’m a betting person, they’re here to stay unless we get deflation, which I don’t have a crystal ball. But I’m I don’t think we’re we’re looking at going into a massive recession anytime soon. Now, I could be wrong but from what I’m hearing, it’s not like anybody’s predicting.

Clinton Wilkins
I think even if we do go into recession, we’re not going to In a situation where the prices are gonna go down, this is the new normal, even if you know inflation slows to that 2% number, we’re still gonna see prices still go up at that 2%, you know, amount on average. So I think they’re certainly going to continue. You know, one thing that we always talk about, you know, even, you know, we talk about existing homeowners doing renovations, we oftentimes talk about people buying resale real estate, and doing Purchase Plus Improvements. And people are always sometimes challenged to find a contractor. What tips do you have for consumers that want to hire a contractor? You know, what should they be asking? And what should they be looking for when they’re looking to hire someone?

Contractor deposits and material purchasing

Dan Monk
Oh when you’re looking to hire somebody? This, I kind of have a short list. Number one, you probably want to be dealing with somebody who is incorporated, that somebody who has a GST number. Incorporation has a lot of things that come along with it. Typically, you have insurance, which is liability insurance, which protects the client, you would have workers compensation insurance, which also protects the homeowner if one of my guys, for example, gets injured on a job site. For whatever reason, the homeowner doesn’t have to worry because I have insurance that covers them, or their injury. If you hire somebody who doesn’t have WCB, insurance, or liability insurance, the client or the homeowner can be on the hook, which is a scary thought. And I’m not a fear monger. This is just the facts of where we’re life is. So, an incorporated company, somebody with WCB, somebody with liability insurance, a safety program is important as well. And do check their references. Simple question, when you’re calling somebody to check out a reference? Would you hire them again? If you would, if they say “yes, I would hire them again,” you’ve probably got a winner. If they pause and say, “Well,” you might not have the right person.

Clinton Wilkins
I think that’s always good one. Yeah, I think that’s the same and so many professions. Dan, I hear it, we have clients coming to us to say, You know what, we were dealing with another lender or another broker, or we went to this branch, and we don’t think that we got good advice. We hear this all so many times. I can tell you, for me, one of the things that I look at is, you know, I look to see if they have a website and I go and see if they have like a Google profile. Because oftentimes, people will go to Google, and like put a positive review if they had something that you know, the best experience ever. But you know, oftentimes more than not, if they had a bad experience, they’re probably going to Google and giving a review. And you always hear, you know, people having horror stories with contractors, but there’s so many good contractors out there that are so reputable. But I think it’s sometimes hard to distinguish, you know, the good ones from the not so good ones, if you know what I’m saying.

Todd Veinotte
Dan, a quick question for you. When it comes when it comes to people wanting money up front, like sometimes you’ll have contractors who will come in and they’ll want to deposit and I get that that a deposit serves a purpose. It shows intent on behalf of… but by the same token, you want to make sure before you start shelling out money to somebody, that they’re going to be there and they’re going to be able to deliver what you would need them to do. And if they’re starting to ask for money, because they’re running out of material or things like… what are some red flags that people could look for? Or, or what are some asks that are reasonable from the contractor when it comes to money?

Dan Monk
Well, you know, Todd, it comes up a fair bit about asking for a deposit. And some people are a little leery. I have never run into a problem because we have a really good reputation. But I take a 25% deposit on signing a contract. And then I take another 25% On the day I start the job, I have 50%. And then I don’t take my other 50% until we’re done. That’s how we work. And it’s worked really well for all of our clients. It’s just a good way for us to be able to secure the job and make sure the client is going ahead with it. The other thing though, is we don’t do time and material work very often. That’s when I come in and I work for you and then you pay me I become your employee, and you buy all the materials and things like that. That’s usually a good indication that the contractor isn’t really well financed. They need you to buy the material because they don’t have accounts. I have accounts at every major supplier in the city. There’s nothing I can’t buy or nothing I can’t get and I actually require that I buy all material for a job, so that I have control over the material. If I have to return something or get more product, I’ve got relationships with all the suppliers. So we don’t really run into it when you’re dealing with a reputable contractor, getting deposits, and you shouldn’t very often be buying your own material. Contractors should be able to supply the material for you, and give you a lump sum price. That’s the way I deal. A lot of times people will do time and materials because they don’t know how to estimate. One of them. They just say, “hey, I’ll do it. It’s x dollars an hour and materials.” Well, the you don’t even know what the job’s gonna cost.

Renovation contracts and client expectations

Clinton Wilkins
I hear that 100%. And just as much as I think sometimes contractors can be challenging, Dan, I’m sure on the flip side of things, clients can be very challenging to. You know, especially around expectation, change orders, things like that, you know. What type of expectation, do you set upfront with these clients to make sure it’s going to be a good relationship on both sides?

Dan Monk
That is, that is, I’m glad you brought that up as a very important point. I am a ‘renovation contractor.’ Notice the whole word contractor, I work with a contract. So I have a very detailed estimate that the client will sign off on that tells them exactly what I’m going to do and the price that I’m going to do for it. It’s going to have the terms and conditions how you’re going to pay. I’ll also have another detailed contract on how inspections will be done. Warranty. It’s a several page document that you’re going to review, sign, and we’re going to have a very transparent relationship about things like experts, timelines, things like that, so that we maintain a relationship. But they often sounds like a bit of a tongue in cheek, but I say, look, I really want to have a relationship with this client when I’m done the job. I’m not just a one and done. I want to I want to have a good relationship. I’m working for the referral.

Clinton Wilkins
Give us a couple quick renovations that you get requests for that you think are really frivolous and are not going to help people love their home and are a waste. What do you think those things are?

Dan Monk
Oh, my goodness. There’s so many that are good. Number one, I’m gonna go with the good ones. Okay. Paint, a fresh coat of paint makes all the difference. If it’s broke, fix it even if it’s minor. Windows, thermal panes can be replaced if they’re steamed up. And you’re going “oh my goodness, I windows they they’re awful.” Thermal pain can be replaced in most windows. But a nice coat of paint. Washing your house. Like just a pressure washer on the outside of the hose can refresh your house.

Clinton Wilkins
Yeah, we always say like roofs and steps and walks, these are the easy things to do.

Todd Veinotte
Dan, listen, we’re just out of time. Hate to stop you. But let’s let’s have you on again. It’s been a real treat my friend. Great stuff.

Clinton Wilkins
I appreciate it.

Dan Monk
Awesome, guys. Thank you so much. Have a good one.

Clinton Wilkins
If you’ve liked what you’ve heard, and you want to learn more, feel free to visit us online at Teamclinton.ca