Real Estate and Mortgage

Reader question: When should you renovate your new home?

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When Should You Renovate Your New Home_

Renovate Your Home When It Is Right For You


A fan sent me an email the other day and asked me the question, When should you renovate your new home? He said that him and his wife had just bought a new home and they weren’t sure if they should renovate before they moved in or after they moved and wanted to know what we did when we bought our house.


Home renovation checklist


It was a question that I really didn’t have to think much about because we are in this position now. We did not renovate before we moved into our new home and preferred to save the cash first before renovating. When we bought our new home I created a checklist so I knew exactly what I needed to do although over the years it seems the list keeps growing.

  • Kitchen
  • Bathrooms 1 and 2
  • Deck

It was easier to read my list as I was going along rather than trying to remember in my head. Every smart planner will have a list so they have information to fall back on. There is no custom list here, you design your own. Grab a piece of paper and start making notes.

I also wanted to have the opportunity to fix what needed to be fixed on my own rather than paying someone else to do it unless of course a tradesman is needed for the job to get it done right. Besides it gives my wife time to go through those renovation type magazines to pick out what she likes.


Neighbourhood new home renovations 


Every time I look out the window in the morning there is a new renovations truck on our street at a neighbour’s house doing something. Our homes range in age from 15-25 years old so most things inside the homes may be outdated and need freshening up or are starting to fall apart due to age.

Our neighbour who is a single-homeowner told me the other day while I was weeding the garden out front that she was in the middle of having her bathroom re-done and this is after living in the home more than 8 years.

What she said was that she could only afford to do x amount per year to upgrade her home but when she moved in even though the house needed some work she decided to save the money to do over time.  So, not everyone wants to rush in and have the fast and ready or instant home (just add water) before they move in.


Needs vs Wants


Not everyone wants to spend money renovating their home, heck some people think we’re nuts for wanting to put a brand new kitchen in but it’s something we want to do, for us. There are however differences between renovation needs and wants. We don’t need to renovate the kitchen just yet but we do need to focus our attention towards the bathrooms.

In the summer we see many homes up for sale around us and open houses that garner lots of attention only because we are in a sought after neighbourhood. Just lately though we notice that of the homes that sell before the new owners move in they have a tonne of renovations done to the house. I have to question the worth of these renovations so soon after purchase when I consider the price they paid for the home.

When you live in a house for even a year or two you can judge which renovations are wants or needs and how you want those renovations to turn out. When you use the house on a daily basis you will learn what you like and don’t like which gives you time to start saving money in your budget for exactly what you want.


Too much to renovate


When you are already buying a home at the top of its value you must be careful how much money you soak into your home because you may never recoup that money for a long time, if ever. An example would be a modest home that was on the market for $495,000 around the corner. This house was priced at the top range of what the home would sell for. It sold in less than 2 weeks for $5000 less than asking price. The home has an in-ground pool, deck and is a back-split.

Over the course of 4 weeks after the previous owners moved out we watched contractor after contractor tear the inside of that house apart. Not only did they put in all new flooring, new bathrooms, new kitchen they also put on a brand new deck. They even got all the interior doors removed, sprayed and then re-hung.

In my head I’m running numbers viciously because I can’t believe how much money they are willing to put into the home after purchase. I can understand if you scored a great deal on a house like we did and then decided to renovate but not at the top price range.

What would happen in the event that they needed to sell fast right after renovating? They are risking losing money on the house because their house might not be worth as much as they think it will be, although I often say “it’s worth as much as someone is willing to pay”. This is when you may see a house that is overpriced for the area and the homeowners get upset at the real estate agent asking, Why has my home not sold yet?

The thing about that is you can’t have $500,000 comparable homes on one street and then a similar home to those and you price it $100,000 more because you renovated it but who will want to buy it? You know the real estate agent will pull the comparables for the potential buyer and they will compare those prices to that of your home.

If you are not sure of the value of your home you can log in to MPAC to view your MPAC home assessment or call them for a copy to be sent in the mail. While you can see the value of your home you will also be able to see what other homes in your area are valued at and that may give you a better idea of which direction to go.

When we bought our home for $265,000 the same model on our street was selling for over $300.000 a mere 12 months after. Now, 4 years later a couple are over $400,000. Our house is 1 of 4 in our subdivision. I’m afraid we don’t live in a custom-built home but we do live in a home built by a well-known builder in town.


Time and funds


When we decided that we would wanted to buy rather than rent the savings for a new home was kicked into high gear while we were renting. We couldn’t afford to complete all the renovation needs or wants before moving into our current home purely because the spare cash wasn’t available.

After saving up for a down payment on our home which was more important to us we figured our home was livable and so what if the carpets were purple. Over the course of time projects have been completed mostly on the basis of priority. It’s a slow process but unless you have the available cash to complete all the renovations before you move in that’s the way it happens.

There is an alternative but taking out a line of credit against the property or increasing your mortgage just seems bonkers. Unless you’re planning to stay in the house for the entire length of the mortgage you’ll be paying for those renovations even after the house has long since been sold.

We wanted to be mortgage free before we were 40 so it was important to us that we kill the mortgage as fast as we could while taking care of projects along the way.

Saving up by budgeting for renovations and searching for the best deals on quality products for your new home project may help you to save some money or renovate your home for less like my friend Catherine at Plunged in Debt did. They renovated their first home for under $25,000 and it worked out for them even though they are as savvy with money as we are.


Handyman work


There are advantages to doing all the renovation work before you move in. First, you don’t have to live with the mess that comes with renovations and secondly there’s no inconvenience of nowhere to wash dishes for example. You can get your ductwork cleaned out and then move in to basically a new house and enjoy that new house smell.

The homeowners at the time were both very old and did no renovations to our home, not even the roof. When we went to put an offer in we considered the comparables and knew we had room to go down on this one given the state of the home.

The previous owners smoked in the house, carpets had burn marks in them and were very old, nothing was upgraded, no deck, unfinished basement.. and a few other things. The one thing we loved about our home was the size and layout and new we had stumbled on to a gem. The house was bought the same day we found it, with-in hours actually. We’re not into flipping houses and I wouldn’t spend my money buying a house that has been flipped by someone else.

All these contractors coming into homes to renovate is great for the local economy,I suppose, but I do have to wonder where the skills of modern man have disappeared to? I can rarely remember any contractors at our home as a child growing up as my father was in the trades and taught me skills that I have retained over the years. However, when looking at open houses with my wife while shopping for our current I noticed vast amounts of badly executed DIY jobs.


DIY home improvement show


I blame some of those HGTV home and renovation shows for trying to get people to renovate on their own when they have no skills whatsoever to get the job done right. The list of home renovation shows on TV is endless but not useless as there is always something to learn although sometimes I wonder where they come up with some of these ideas for TV shows.

Even Mike Holmes says do it right, so do it right. As much as I enjoy watching those TV programs it doesn’t make me a professional it only gives tips and ideas. Working in the trades of education and experience and not something that the average person will learn overnight or by watching the tube. All kidding aside, if you don’t know what you are doing, don’t begin a project and waste money that you worked hard for to botch up a job that may cost you more in disaster clean-up down the road.

So when it comes to renovations I’d sooner renovate as I go along taking my time to make sure I do it right and the way I want it rather than spending thousands upon thousands before I move into a home. If I need to call in the right people to get the job done, I’ll do it. If you fancy watching those DIY renovation reality shows and want to take on a project, be warned and at least do your homework.

Taking the time to save up the cash in our budget  that we need to pay for our renovations has worked for us rather than rolling it into the mortgage or line of credit. It’s a personal choice either way, do what makes you happy.

Discussion Questions:

  • What renovations did you do to your new home before you moved in?
  • Did you add the renovation costs to your mortgage or line of credit or did you save up cash?
  • Was there a job you completed on your own where you should have called in a professional?


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