Which parts of a home are best to renovate?
That is a great question, especially given how expensive and time-consuming renovations can be. The short answer is that it depends on what you are trying to achieve.
Here are some common reasons that drive homeowners to renovate.
Enhancing functionality and enjoyability for personal use. In this scenario, I would encourage the homeowner to audit their home to see what’s working and what isn’t for them, as well as what they need and what would be nice to have.
Some things to think about when determining this are how many people live in the house and if the space adequately meets their lifestyle preferences. If it doesn’t, what is it lacking? Is it storage, space to entertain, a home office or all of the above? Do they cook a lot? Is the décor of certain spaces dated and needs sprucing up? Answers to these questions will inform what changes to make to the property to make it more functional and enjoyable for them.
Having said all that, one thing I would like to flag is that there is often an assumption that the more renovations are made, the more the value of a property will increase. However, that may not always be the case. For certain upgrades, the answer will be yes. For others, it will be no. In fact, some renovations can even lower the value of a home. For example, turning a two bedroom into a one bedroom home typically would reduce its value.
Upgrading a home to create more equity when it’s ultimately sold. There is plenty that can be done to increase the monetary value of a home. Generally speaking, having updated bathrooms and a kitchen, as well as a finished basement might add value to a home. Additionally, having energy-efficient appliances, freshly painting the space, and beautiful landscaping will also help make the property more sellable, but might not add appreciable value to the sale price.
Buying an investment property to get the best return. Some people will buy fixer upper properties to renovate and sell or create a basement apartment to generate additional income. If this is something you are interested in, hire a real estate agent and let them know about your intentions. They can provide valuable guidance on what to look for in a suitable home.
If you are considering renovations, here are some tips on how to approach it.
- Be clear about your goal.
- Review your finances, set a budget you are comfortable with, and add a contingency for these three key words of renovation: “might as well.”
- Shop around and consult with a few contractors before securing any services.
- Do research to see if the renovations will require permits. Make sure you have those in-hand before work begins.
- For basement apartments, check your municipal rules and by-laws to ensure they are allowed and what steps need to be taken including inspections.
- Consider consulting with a local real estate agent to get their thoughts about your ideas. Ask them to share their experience about the impact on the resale price, the desirability of changes for other buyers when reselling, even what others seem to like. Remember they see hundreds if not thousands of homes every year.
All the best!
If you have a question for Joe about the home buying or selling process, please email email@example.com.
This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.