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Emotionally investing when renovating your home if you plan to move may cost more than you need to spend.
Lately, I’ve been quite impressed with the house prices in our area, but at the same time know that if we sell, the cost to renovate and buy will weigh heavily on our minds.
The real estate market in Canada might be hot, but if you have to renovate, that might mean missed money opportunities.
The top three questions next to time-frame that you need to answer before putting your house up for sale are;
- Should we renovate our home to get a better return?
- How much will our renovation budget be?
- Do we want to upgrade or downsize by buying a new house?
On our street for 2017, we’ve had five houses up for sale, all of which sold in around a week or less.
That might sound impressive, and it is because homes don’t last long living in the Greater Toronto Area (GTA).
Many nosey neighbor radars are going off with no more than 100 houses on our street.
That’s us ^^^^; we admit it.
Who is buying these houses?
Most home buyers who have moved in are in their late 30s and up, with and without children.
It’s near impossible for the Millennial generation to buy a house in Toronto, most of which start in and around the million-dollar mark.
Most of these houses could do with upgrades and renovations, which means more work and more money.
Finances can become a struggle with University and College loans and a war in the employment market.
If it’s hard to pay rent, you’ll never make it through a mortgage.
This is why more and more younger adults rent instead of buy.
They can’t afford it.
Everywhere we look, house prices have skyrocketed, especially in our area.
Our net worth update shows that our house is set at $365,000, but a comparable home sold for $575,000 on our street.
That number would certainly boost our net worth by over one million dollars; however, we know we still have to live somewhere.
Owning a home is like sitting on an egg; when it hatches, you’ll either make a mint or cry to the bank.
Moving to smaller neighboring cities might not get us much more than we already have unless we’re prepared to pay more.
Living in a small village appeals to me more than the city, but even the country’s properties are in the millions these days.
Pair all this with increased commute time and stress levels waiting in traffic longer than needed daily.
A fan wrote to me for tips about renovating his house before selling it or just selling it as is. Let’s see what he had to say first.
Renovating or Run
My wife and I have lived in our house for ten years and have done minimal renovations.
We bought the four-bedroom 1500 square foot bungalow for nearly one million dollars, knowing it needed some work.
The house has two bathrooms with a shower and a tub, a single garage, and parking for two vehicles.
At the time, the price was right, and we needed somewhere to live close to work, and renting was not something we wanted to do.
Sadly we know that was a silly mindset to cling to, as it could have ended had we not had a budget.
I’m the type of guy who fixes or hires someone to do it as needed.
Renovating Before We Sell
The other day my wife and I discussed the types of renovations we should complete before we put the house up for sale.
We’re unsure if we should renovate the house, sell it, and move on.
Our area’s real estate market seems busy, but we’re in no hurry.
Ideally, we’d like to move somewhere close to where we are now in a Toronto Suburb but somewhere cheaper.
This means that getting the most out of our house when we sell it is important to us.
What we’re not sure about is whether it would be worth it to renovate or let the new owners do this.
Do you or your readers have any personal experiences they want to share with us?
Network With A Real Estate Agent
First, talk to your real estate agent and see what they say about renovating a house in your area.
If your house has potential, I’d certainly invest in making sure that the critical rooms in your home get a face-lift, including a fresh coat of paint.
Whichever rooms you want to renovate depend on your budget and motivation.
Related: How we renovated our house for $25,000.
Buying from Big Box renovation stores such as Rona, Lowes, or Home Depot will yield you more affordable kitchens and accessories.
However, remember that whatever you spend on a kitchen, you’ll only see a certain percentage back from your initial investment.
Most people will shop at those stores when renovating their homes.
Don’t go to high-end stores to frost your renovations but keep the budget reasonable so that the new owner isn’t dealing with a crap job and paying for it.
Most of the houses around here have had minimal renovations and yet still yield sale prices higher than the original asking price.
A hot market can pretty much sell any home.
Return on Investment
In other words, Is It Worth It? Will you make any money back from it?
If not, more is up to you and the real estate market when selling.
Not one person I know wants to spend the time and money to renovate a house they want to sell unless they are trying to hook more cash from the buyers.
There are plenty of buyers who fancy a house renovated top to bottom.
Return on investment doesn’t just include the financial aspect of the deal either but also the physical investment.
Renovating a house is not a small undertaking unless it’s a quick fix.
When remodeling the game’s name is to “Do it right the first time,” however, trusting someone else’s work is another story.
Not all home inspectors catch things wrong with a house during the inspection, nor do they check everything.
There’s always that risk of buying a renovated lemon that has to be torn down and the renovating process to start over.
I want our dream home to be a project I can finish.
I’d go for a custom-built home from the get-go if we had the money.
Although I like older homes, they come with greater financial risk depending on age and how well they were taken care of.
What does this mean for you?
If you want to renovate your house before selling, you must face living through it not just once but potentially twice if the new home you buy needs repair.
The main goal of renovating is to make money.
How long will you live through renovating and possibly renovating your new home?
Many questions must be answered before you sell and buy a house.
Living Through Renovations
When you’re already living in the dwelling that you will be renovating, there are inconveniences that you and the family would have to endure.
This might force speed on renovating, which causes mistakes to happen.
They might not fail you but the new homeowner.
If your renovation falls apart, you will pay for it twice.
With contractors in and out of your house, that turns into a mess zone with dusty air can become an environment you might not want to keep your family in.
Some people move into their basements while the main level of the home is having renovations done.
This is a great option, but you’re still not free from the above inconveniences.
Moving into a temporary accommodation such as a hotel or short-term rental lease may be ideal.
Keep these expenses in mind when deciding on your renovation budget.
Don’t be in a mad rush to move in with family unless you’re prepared to deal with the potential for arguments.
It happens to the best of us, although if rent is free or inexpensive, that might be your best option.
Home Renovations That Add Value
Home improvements such as a garage addition, stamped concrete driveway, pool, or even a metal roof might not bring you the return you hoped for when you sell your house.
What will sell your home is how big your property is and the size of your house.
You can easily add more money to your real estate investment by making the right moves when upgrading or renovating your home for sale.
Not all renovating projects will give you a 100% return, if any, but certain ones score bonus points with buyers.
Fix the obvious stuff if you want to make an impact when the For Sale sign goes up.
What you want to avoid is overbuilding your neighbourhood.
Right now, a friend is struggling to sell a gorgeous home in an area with older homes.
The house is different because it’s still young, and it looks out-of-place as it’s modern looking and more significant than every other home.
This will be a home they will struggle to sell for that reason.
Now that we’ve seen what’s inside some of the homes on our street, we know the renovations we want for our house might be a bit much.
We aim to keep it simple and save money for renovating that appeals to us.
Best Types Of Renovations
Enhance your home renovations by sticking to the main rooms that cause the most fuss for potential buyers.
Almost every buyer gravitates to the kitchen and bathrooms.
The flooring and tile work is another renovation that will bring the house to life and call on the buyers to bid.
The worst thing you can do is renovate a house to sell without keeping the renovations neutral or current.
Any buyer will see that they will have to redo again to update the home, and honestly people don’t have the time or money to do so.
Don’t imagine living in the house dream about selling it and the green in your pocket.
Now that I’m a dad, I’m struggling to get any renovating done around our house.
Our son keeps me busy, as do both of my jobs.
Best Rush Renovations
I could do some rush renovation to add more appeal to our home if we had to drop everything and sell it tomorrow.
Where the money is at:
You will almost always recoup your money for the above three renovations for the competitive housing market in your area.
If you over-renovate, you risk recouping less money because your house is compared to Joe’s across the street.
He renovated it for half the price and sold it for a high price tag.
Catch my drift?
Don’t emotionally invest in your renovations if you plan to move.
This is one of the main reasons your neighbors scout through open houses.
They want to see what you did to your home and how much they need to renovate their own to see a similar return, if not more.
Be mindful of the home renovation products used as well.
There’s no point buying hardwood to renovate the floors if the entire neighborhood is laminate or carpeted.
Yes, you may get a bit more money, but odds are you’ll get what everyone else is getting, and that’s a comparison of the houses with laminate or carpet.
Then again, the right buyer might pay the extra for the luxury of hardwood.
Will you risk it? The choice is yours.
Renovate Your Dream Home
Keep your dream home renovations for your final home and keep your nose out of fancy renovation magazines unless you’re prepared with a healthy renovation budget.
What looks nice might not fit what everyone else has.
Quality home renovations don’t come cheap, and if you get an unusually low renovation estimate, I’d put the brakes on and investigate further.
If you have a carpenter, plumber, or electrician in the family, call on them.
Maybe they can help you for a discounted price, or you could help them in return for free renovations.
Renovations To Avoid
If you don’t plan to stay in your house, avoid invisible renovations and those customs to your home that will narrow your selling potential.
All those little fixes you do around the house likely won’t matter much.
I won’t walk into your house and say oh look; there’s a new furnace.
These are more home maintenance types of renovation projects.
You will see limited returns, if any.
Blowing more insulation into your attic, and installing new plumbing, ductwork, etc., will likely go undetected when you sell your home.
Fix what everyone can see unless, of course, you must repair what you can’t.
Even then, a massive landscaping project might sell a home, but it won’t yield returns like other areas of the house.
Spend your money wisely.
I’m not saying to cover up repairs; I’m simply suggesting you put your budget into areas that will make money for you.
Discussion Question: What renovations have you completed before selling your house?
Please leave any comments on this post in the section below.
Thanks for stopping by,
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