Worthwhile Eco-Friendly Upgrades as a Solo Homeowner, with Jordann Brown
Welcome to The MapleMoney Show, the podcast that helps Canadians improve their finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.
Purchasing an older home and funding major renovations is hard enough for two people, let alone one. The numbers can get tricky in the current housing market if you’re a solo homeowner. This week on The MapleMoney Show, I brought in an expert.
Jordann Brown is a content marketing manager for Zolo and a personal finance expert who writes on debt management, homeownership, and budgeting. She has been featured in publications including The Globe and Mail, Toronto Star, and CBC.
Over the past few years, Jordann has spent a significant amount of money on eco-friendly renovations to her Halifax home. I sat down with Jordann this week to learn more about her experience and how she manages her budget as a solo homeowner.
Jordann details the many improvements she made to her home since purchasing it in 2016. Her strategy was to start small with things like painting before moving to larger projects. She estimates that she has spent a total of $30,000 on renovations. One big project was replacing the home’s oil-burning furnace with an energy-efficient heat pump.
Jordann is a solo homeowner, and she says that household finances can be tricky for anyone living on one income. They face different risks than dual-income households, and careful planning is required. Jordann leaves us with several tips for budgeting and managing household emergencies on a single income.
Do you prefer to invest in socially responsible companies? If so, our sponsor Wealthsimple will help you build a portfolio that focuses on low carbon, cleantech, human rights, and the environment. To get started with Socially Responsible Investing, head over to Wealthsimple today!
Episode Summary
- Jordann explains her criteria for buying a home to renovate
- The total cost of Jordann’s home renos
- How home energy rebates work
- A list of things that actually increase the value of your home
- Budgeting as a solo homeowner
- Tips for managing emergencies as a solo homeowner
- COVID has caused Canadians to become better at planning for emergencies
- The challenge of obtaining a mortgage with a single income
Read transcript Purchasing an older home and finding major renovations is hard enough for two people, let alone one. The numbers can get tricky in the current housing market if you’re a solo homeowner. This week on the Maple Money Show, I brought in an expert. Jordann Brown is a content marketing manager for Zolo and a personal finance expert who writes on topics such as debt management, homeownership and budgeting. She’s been featured in publications including, The Globe and Mail, Toronto Star, and CBC. Over the past few years, Jordann has spent a significant amount of money on eco-friendly renovations for her Halifax home. I sat down with Jordann this week to find out more about her experience and how she manages her budget as a solo homeowner. Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Do you prefer to invest in socially responsible companies? If so, our sponsor, Wealthsimple, will help you build a portfolio that focuses on low carbon, clean tech, human rights and the environment. To get started with socially responsible investing head over to maplemoney.com/wealthsimple today. Now, let’s chat with Jordann… Tom: Hi, Jordann. Welcome to the Maple Money Show. Jordann: Hi. Thanks for having me. Tom: You’ve got an experience that’s different than mine in you’re a solo homeowner. Another thing I want to get into later in the episode, too, is you bought an older home. And personally, I wouldn’t know what to do with it. I’ve always kind of thought, I’d get a newer house and understand it better. There’s just newer technology to it and everything. So there are a few things I want to dive into with you—just how you went about the whole solo homeownership, your house specifically and what you’ve been doing with it. Just to start off, when did you first buy your house and what did the process look like at that time? Jordann: I bought my house in 2016. I was 26 at the time and I didn’t buy it alone. I did buy it with a partner, but I now own it by myself. The housing market was a little bit different back then. My house had sat on the market for about two months and had had one offer that had fallen through because there was a minor cosmetic issue with the roof. What I was looking for at the time was a home that was in the ideal neighbourhood but had been neglected and needed some upkeep and therefore I could get it at a lower price. And that’s exactly what I found. I wouldn’t have been able to afford to buy in that neighbourhood otherwise, because I was only 26 and only had a very small down payment and a very small budget. I was able to make that happen because I was looking for an older fixer-upper house. Tom: A few things. First of all, can you tell people where you live because that might affect their idea of the price of real estate? Jordann: Absolutely. I can even disclose more than that. I live in Halifax, Nova Scotia. I bought my house, which is a two-bedroom with about 700 square feet on the main floor. It’s small for $270,000. It was pretty affordable. Unheard of by today’s standards. It’s not relatable for anyone who’s looking to buy a house right now, I’m sorry (to say). Tom: Well, that’s why I wanted to set it up. Even back then you weren’t dealing with something like the Toronto market where things are two or three times, at least. Jordann: No, and I was very grateful. Halifax has some drawbacks. It is a little bit further removed for the industry and for jobs and that kind of thing. But the housing affordability at that time was very appealing. It’s unfortunately become a lot more like Toronto now. Tom: You mentioned the idea of buying an older place with an eye toward fixing it up. I guess this is part of my thought when I buy a new place (or newer a place). I don’t have the skills for that. I don’t think I have a home renovation in me. Were you seeing certain things that you could actually do yourself or is this hired out? Even when you were buying it, how are you picturing these changes you might make in the future? Jordann: That’s a really good question. I had some very specific criteria when I was looking for a home to renovate because I had never owned a home before. I had no idea what my DIY skills were actually going to be at, or where I would sort of max out at my skill set. I was fine with learning to do things but was fine with like ripping an entire bathroom apart by myself? I didn’t know so I looked for a house that was not a gut job. It had been renovated. The house was built in 1932, but the last significant renovation was in the 90s. It has older kitchen cabinets, but there was a dishwasher. The bathroom was small and cramped, but there was no knob and tube wiring. It wasn’t completely a tear-down job. It needed some cosmetic and some structural, but it was livable when we bought it. You could move right in and then just start working away at things. And honestly, I started small in terms of the DIY projects. I started with painting and then moved on to replacing the flooring in the basement and sort of just built on my skill set a little bit at a time. Especially in the first few years, when it came to anything important or scary, usually things that involve water or electricity, I hired those out. For example, I had to replace the hot water tank within the first year. There was no way I was doing that myself. Even though that is a relatively straightforward project for someone with minor plumbing skills. I had no plumbing skills so I was going to hire that out. Tom: I was proud of myself just for changing the showerhead. I’m not going to mess up the hot water tank myself either. or the showerhead. Jordann: Changing the showerhead, I think I did do that the first week as well. But I was so scared that I was going to like cause a flood—even though now I know more about it. I know that’s pretty much impossible with the showerhead, but I was still scared. Tom: I don’t know if you’ve tracked this, but do you have an idea how much you’ve spent on all these renovations, including hiring out and then supplies and everything? Jordann: I’m a personal finance nerd, so I track everything all the time. And especially in those first few years, I tracked religiously because I was really interested in how much these things were going to cost. I did some major projects. I replaced the heating system in the home. I moved from an oil furnace to an energy-efficient heat pump, mostly selfishly, so I could have access to air conditioning. As I mentioned, I replaced the hot water heater. We did some electrical panel upgrades. I redid the fireplace, so there was a wood-burning fireplace. All of these are sort of bigger ticket items within the first three years, which was when the bulk of the renovations happened because then, of course, COVID hit and nobody could come to the house anymore for a while. I think it was around $30,000 just to do those major components, plus all the little incidentals, like painting every room, a lot of yard work, a lot of purchasing sod and soil and all those kinds of things as well. Tom: No, that’s pretty good, actually. That doesn’t seem that bad. When you first bought your house how was that cash-flow wise? I assume you’re renting before and then you bought the house? Were you pay more a month or less a month compared to renting? I’m just wondering because, at least for me, when I first got a house, it was more than I was paying for a smaller place to rent. It actually seemed like a harder time to do things like renovations because all of a sudden I’ve got new expenses like property taxes and things like that. Jordann: Yeah, absolutely. When I was renting, I was paying $1,500 a month for a two bedroom. Then when I moved to the house, just the mortgage and property tax together ended up being around the same amount. But then you have to add on, utilities, insurance, heating, water, and electricity and it all adds up quite significantly. I attempted to be extremely diligent with my cost forecasting. I had a budget. I used a bunch of online calculators to try to determine what my electricity was going to be when we moved into this new place. Using that information, I tried very, very stringently to stick to my personal rule of not spending more than 35 percent of my net income on housing. I think it was about 38 to 40 based on my projections. After the first year, when I looked back, it ended up being closer to 42 percent, which is really not bad for a first-time homeowner in terms of estimating costs because you don’t know what you don’t know, right? I tried my best, but inevitably things came up that I was unprepared for. The good thing about buying a house, though, is you no longer have to save for a down payment. All of the money that I was using to save for that down payment—most of which came from side hustling, wasn’t even part of my budget. It just went straight into the RRSP. I used that money instead to budget for the renovations. The way I did it was set aside a certain amount of money per month for the renovations that I would do (that would keep me busy) and then I wouldn’t start another project, obviously, until the first one was completed. So, if I ran into a bunch of snags that all that excess money just rolled over into the house renovation budget. And separately, I would save for the bigger ticket projects. And those just got funded whenever they got funded. Tom: That’s a good way to go, especially when you’re living in the place. Like you said, this wasn’t a gut job so you don’t need to be doing a bunch of different renovations all at once. There’s the money side of it. You’re only going to have a certain amount of money to do certain things at a time. But also you need to live in the place so you don’t want to be renovating every room at once, I assume. Jordann: My house has a lot of original features and one of the things I really love about it is it has all the original doors. I got this idea in my head that I wanted to strip the paint off the doors, back to the original wood. I had already done it with the fireplace mantel. It seemed really easy. I started with the bathroom door for some reason, which in retrospect was, so dumb. It took a month. Eventually, my husband, who’s now my ex-husband, just put his foot down saying, “We need a bathroom door. This is not okay.” Tom: I never thought of that. Jordann: The “one project at a time” rule just became a matter of keeping the house livable while also working to fix it up. Tom: You mentioned with the furnace, that it was eco-friendly. Did you do that with anything else? Are you working towards that? Obviously, it’s good for the environment, but I assume it’s also better for things like bills and such, too? Jordann: Absolutely. The heat pump was one part selfish, one part eco-conscious. As I mentioned, the first summer spent in this older home with no air conditioning was absolute torture, especially because I work from home. There was no escape from the lack of air conditioning. It was great to put the heat pump in for the air conditioning, but also it was great because it was better for the environment. I did not like the idea of being reliant or burning oil from my heat source. It also saved me about 40 percent on my heating bills. So for me, it was just a win-win all around. Yes, I did need to put up that extra money up front to get the heat pump put in, change the duct work, and upgrade the electrical system. But it set me up to save month-to-month and keep my monthly cost low. Which, for me, is very important, especially as a solo homeowner now—to have low monthly costs that are within my “single income” budget. And, if I need to spend money on bigger projects, I can just save for those and do them as needed. I did some other things as well. I upgraded to a programable thermostat, which let me track my home’s energy usage and figure out the optimal temperature I was comfortable with and also helped save energy. Tom: I like Nest for my programable thermostat. I’ve got the little temperature sensors in different floors too. Sometimes it doesn’t feel optimal because one floor gets sort of overheated or over cooled. But if it’s not optimal as a bill, it’s at least optimal as comfort. Jordann: One of the things that I did was make some modifications to the ductwork in my home because there were hot and cold spots. By making the ductwork bigger in some spots and smaller in the other, I was able to rebalance the home and make it overall more comfortable, which meant less energy usage because it wasn’t having the heat pump work overtime to keep the cool spot warm and having the rest of the hospital too warm. Tom: Yeah, but I’ve heard of things—I don’t know much about them. I don’t know if you do either. I’ve heard of things like fans you can put into the ducts that’ll boost the flow, if it’s trying to get three floors up or something like that. Jordann: That is an option. But you have to keep in mind that they also take energy to run, so they are sort of cutting into your energy efficiency. But the benefit is that you do get a little bit more comfort. It’s just about the balance between those two. Tom: When you changed your hot water tank, was that more efficient in any way? I’ve heard of the tankless ones and I can’t fully wrap my head around how they’re more efficient. I guess you’re not holding hot water. But it seems like maybe it would take more energy just to get it hot so fast. It’s something I’ve been looking at and figure out if it’s worthwhile. Jordann: The hot water tank that was in the home was at the end of its life and it was also oil fired. What I actually did was get a heat pump that could help heat my hot water. I switched to all electric. And the way that it works is there’s essentially a holding tank that doesn’t heat the water. It just holds the water. And when the heat pump is running, it will heat that water with the same efficiency that it creates heat. It’s about 400 percent efficient versus a straight electric hot water tank that is 100 percent efficient. So you’re saving about 75 percent on your hot water heating costs. I upgraded my hot water tank knowing eventually I would get a heat pump that could do that. Generally, when it comes to hot water tanks and their efficiency, the best you can do is 100 percent because straight electric heating is 100 percent efficient, and no amount of instantaneous heating is going to ever change the laws of physics. It will only ever be 100 percent effective. Tom: That’s what I was wondering. For a regular hot water tank to hold the heat probably doesn’t take that much power, I’m guessing. It’s something, but it’s self-contained, so I assume it’s not too bad. Jordann: The issue with that is the losses from heat escaping the tank, which used to be a big issue with older hot water tanks, but now with modern hot water tanks, the insulation that’s built into the tank is so robust that those losses are mostly negligent. Tom: Just more on the eco-side, with an older house what about things like windows and such? With mine, I feel like I’m missing out there. If I had had it built myself, I probably would have went for a thicker window or some kind of more insulated window because I can feel the cold in the winter. And I’m thinking, in an older house, unless the windows have been changed, that’s probably even worse. Jordann: That was one of the things my house had already addressed. The windows were newer. There were three older windows when I moved in. Two of them have been replaced by me. What, honestly, was the best bang-for-my-buck when it came to reducing drafts and air losses was to seal (using silicone caulking) around the edges of the windows. Because most of the time the cold air is not coming in through the window, it’s coming in between the gap of the window and the frame. If you can seal that, then you will reduce a lot of the cold air that’s getting into the house and, subsequently, heat escaping. Air sealing is “hands down” one of the best returns on your investment, because you can do it yourself with things that you get from Home Depot. It just stops hot air from escaping your house. A more efficient heating system, is great. But if you can stop that heat from escaping in the first place with insulation and good windows, that’s ideal. It is hard to insulate an older house because of the plaster walls and that sort of thing. You can’t install fiber glass batts without getting rid of all of that beautiful plaster, which is one of the reasons that I bought the house in the first place. But you can blow in insulation in the attic. You can insulate the basement. You can do all of these other things. It’s just a matter—especially with an older house, of looking at what rebates are available, because there are a lot of provincial and federal rebates available right now for greener homes. It’s a great economic booster. There are so many touch points with local service people and whatnot. There are lots of grants out there available. Then, weighing that against what you’re willing to put into the house financially, how much you’re willing to basically demo your house to make these upgrades and choosing from—the average home would probably have two dozen things you could do to improve its efficiency. So, you just choose the ones that fit your current criteria. Tom: One quick question about the window thing you mentioned. When you said caulking around there, did you mean just around the frame or do you pull off the—I don’t know what you call it but the baseboard thing. Would it be worth pulling that off and insulating in there or truly just going around what was already there? Jordann: For the windows that were intact, I would go around what is already there. Again, old window casings, I don’t want to tear them off for fear that I’ll break them because they’re really beautiful and ornate and brittle and old and probably covered in lead paint. So, let’s just not touch them. For the windows I did replace, yeah, we sealed around the windows themselves before the new casing was put on. Then I also walked around the casing once the windows were put on. There is a noticeable difference from a new window to an old window but it’s not as much as you might think. Tom: You’re giving me ideas for a summer project, so I don’t have to deal with it in the winter. I don’t care about the frame around there given it is only a 10-year-old house. I’d be fine if those got damaged or destroyed and I got new ones if it meant I could seal that better. I’d probably be up for that. Jordann: Oh, yeah. With a newer house, you could pull those off. You could probably reuse them. But if they did crack or something, you would be able to find a perfect replica. Tom: Yes, definitely. With rebates in general, I know there’s different provincial ones and everything, do you have sort of a general idea of how much we’re talking as a percentage? Are these renovations nearly free or are they just giving a little bit back? And granted, if you’re saving on utilities in the future, maybe it does balance out to nearly free? Jordann: As you said, it really does depend on what province you’re in. There are federal rebates right now. Then each province has their own energy efficiency body that would administer their own rebates. There are some rebates that are 100 percent free. For example, a common one is smart thermostats. You can actually get those for free from your local, provincial, clean foundation or energy efficiency organization. LED light bulbs would be another thing that would be completely free as well as low-flow showerheads. They give all of these things away because they’re lower cost anyway. But then when it comes to the bigger ticket items, like a heat pump, new windows, generally it’s a percentage. It actually is typically a flat rate depending on what you’re getting done, but it equals out to you usually 25 to 75 percent of the cost that will be covered. So, it’s a very good chunk. It doesn’t pay for at all, but it does decrease the amount of time it’ll take for that renovation to pay for itself from decreased energy costs. So if you are going to spend $2,000 on upgrading insulation, the government pays for half of it. So now it’s $1,000. And you’re going to save $200 a year on your electricity bill and your payback has gone from 10 years to five years. That’s worth it for some people. If they’re not going to stay in their home for a long period of time, a long payback is not a good incentive to do energy efficient upgrades. But if you can shorten that down to five years, that will be worthwhile because, unfortunately, energy efficiency upgrades don’t add a lot to the sale price of your home. You hope they will, but the evidence is very limited on how much they actually add. And the little bit of evidence that is there, is not that compelling. Tom: That doesn’t surprise me, actually. Like you said about how you were predicting your power usage and stuff before you moved into a house, I’m assuming most people don’t do that. And if they’re not doing that, then they’re probably not giving that extra weight to being more energy efficient. They’re not thinking, “Oh, I’m going to save $20, $50, on a utility” so they’re probably not going to add that into the value of their offer. Jordann: Unfortunately, the things that increase the value of your home tend to be more visual. Things like new kitchens and new bathrooms versus anything to do with the mechanical, roof, flooring or your windows. Those are structural things. And most homebuyers just expect those to be in good condition. It’s not a bonus if you’ve gone above and beyond the standard. The only exception, would be if you happen to find an eco-conscious homebuyer. But that is really limiting your potential buying pool. Tom: Yes. Jordann: There aren’t any directories right now for eco-conscious home buyers to specifically find those homes. So, unless you happen to find that one person where that is a high value to them, don’t expect your energy efficient upgrades to translate to a higher selling price. Just do them for yourself. Tom: I just recently had an episode actually about home renovations and that’s what I came away with from that. You’re better off doing any renovations for yourself while you’re living in it instead of feeling this need to do a bunch just before you’re about to sell the place. You don’t get to enjoy it. You’re doing it just for resale value. You might as well do if two years or five years before you sell the place and enjoy it. Do it because you want it. In these cases, maybe that doesn’t add to your value, but at least you’ve gotten some sort of personal value out of it. Jordann: It adds to the quality of your life. It might not add to your bottom line, but that’s not all what life is about. It is also about enjoying the home while you live there. I feel that should be at least as equally weighted as the potential financial return on your investment. Tom: That’s something I found. I have kids and when they were little toddlers, they were destroying the walls, banging toys into them and everything so all the paint was chipping. Before selling my last house, I had a painter come in. And for about $600, he touched up everything. If this kind of stuff happens again, I’m just going to have him come in and do little touch ups. I can get it done every two years for next to nothing instead of living with all this paint peeling off all over the house. Jordann: Yes, it’s just a little bit of irritation every time you see it, right? Tom: And, obviously, in that example, you can paint yourself. But I’ve seen bad attempts at matching colors when you’re when you’re just trying to touch up a wall. So it was well worth it to pay $600 to get the entire house kind of touched up with no awkward patches on the wall or anything like that. Jordann: Yeah, absolutely. Tom: So before we’re done, just to bring it back to the solo homeowner side, too, is what else have you learned from this? What is different in how you budget for a home as a solo homeowner? Jordann: The budgeting part is definitely more challenging because you only have one income to rely on. There isn’t that extra buffer of security, especially when it comes to job loss. If you are in a two-person earning household and one person loses their job, you’re only losing a portion of the income. Probably a pretty small portion, because in Canada we do have employment insurance. As a solo homeowner, I would be losing a lot of my income, probably the majority of it, and I would need to be able to still pay my bills and mortgage. I have an emergency budget for job loss. It shows what my income would be in that scenario. Can I still meet my minimum monthly obligations? And it is a little bit tight, but it does work. That just gives me the peace of mind that if something like that were to happen, I would still be prepared. Another example of how it’s different would be when it comes to home emergencies. Emergency repairs can be very expensive and you don’t have the two incomes to cover that cost. I’ve compensated by having a larger than normal emergency fund. When I was a two income household, I was fine with the normal three to six months of expenses that we all tout as being a good option for an emergency fund. I have since doubled that because you never know… You might have a catastrophic home emergency coupled with job loss. Things happen all the time. I think I’m a little bit more conservative with my finances than I would be if I was in a two income household. And then in addition, I feel like I just live in my house differently. I do the changes to it that I want to do without consulting another person. It took quite a while to get into that mind frame of making the home work for me instead of making the home work for me plus another person—even maybe holding space for another person, if another person were to come along at some point. I don’t do that anymore and it has added so much personal enjoyment for me, to my house. Tom: The whole talk about emergency funds just reminded me of a couple of weeks ago. I had our mutual friend Alyssa Davies on. She was talking about her three emergency funds and how she protects for everything. It just seems so much more important. And I said this then too, when COVID happened, the idea that you could lose a job and have all these other issues all at once, seemed so much more real to me because, luckily, I was fine, personally, but I saw it all around. That old advice of three months emergency fund, when you look at something that different and crazy, it’s easy to kind of reevaluate that. Maybe it’s worth having a little more emergency fund than most people have. Jordann: I think COVID has really redefined our standards for just how bad an emergency could be. You lost your job and it’s going to take a few months to find a new job so you need three months of living expenses. Maybe the business you work at is going to be closed for the next two years. What are you going to do about it? That is a completely different scale of emergency that was not something any of us ever really had to think about or deal with. Combine that with the rising prices of homes. Now you don’t have a $1,200 mortgage payment to make—you have a $2,500 or $3,000 mortgage payment you’re going to have to make with this income that you no longer have because your business is closed for two years. I do think that we, as Canadians, probably have just, naturally, become better at planning for emergencies because of this new set of circumstances we’ve been presented with. Tom: Yeah, it’s made me more aware. And speaking of rising home costs, this most recent mortgage renewal was the first time in a long time I’ve done a fixed mortgage just because I kept thinking mortgage rates are going to go up eventually. And now it looks like they are. So maybe I made the right choice with the fixed rate this time. When I made that choice for myself, it just seemed like another form of protection. I don’t want my mortgage payment to suddenly jump up a lot if, interest rate wise, things go crazy. Jordann: Yes, absolutely. I went through the same experience last year where I had to refinance my home into my name alone. Essentially, I was applying for an entirely new mortgage. I was definitely a little bit nervous about that as a solo homeowner. I bought this house as a two income household. Now I’m trying to qualify as single income. Is my income going to be enough? Are they going to account for my freelance income, which made up a significant portion of my overall income? Will they take that seriously, that it’s like a real job? Fortunately, it was fine, but it was definitely nerve-wracking. Once I got that rate locked in, I did sort of breathe a sigh of relief. No matter what happens, I know what my mortgage payment is going to be for the next five years and I can afford it. Tom: I’ve always been very pro variable mortgage, but just seeing how low rates were at the time, it just made more sense to go that route. Jordann: Yeah. Tom: Well, thanks for running us through all this. We got to talk about a lot of interesting things. Can you let people know where they can find you online and what you’ve been up to? Jordann: Yes, absolutely. So you can find me most actively on Twitter @jordannwrites. I also have a website where I write about homeownership, renovations, paying off debt, et cetera. It’s called, My Alternate Life. I also write a solo homeownership column over at the Zolo blog so you can find me there as well. Tom: Great. Thanks for being on the show. Jordann: Thanks so much for having me. Thank you, Jordann, for the insight on eco-friendly home renos and how spending money in the right places can help you save in the long run. You can find the show notes for this episode at maplemoney.com/197. As usual, if you have a moment, head over to our YouTube channel and subscribe there, as we are getting back to releasing never-before-seen content, soon. Either search for Maple Money or go to maplemoney.com/youtube and subscribe today. As always, thanks for listening. We’re closing in on 200 episodes and the show couldn’t exist without you. I really appreciate it and I’ll see you next week.
Resources
- Visit Jordann’s website
- Follow Jordann on Twitter
- Jordann Brown, Columnist at Zolo Real Estate