Category Archives: home upgrades

Should You Sell Your House or Renovate It? Either way, it’s an expensive, time-consuming proposition.

A home for sale and a man working on a home renovation project.

Your house may not have changed much over the years, but you probably have. Maybe you were single when you signed your mortgage papers, and now you’re married with children (or divorced and sometimes with your kids). Perhaps you’ve added some pets and wish there were amenities like cat doors. Or maybe that cute, little starter home is simply little and no longer cute to you.

However your mind gets there, many homeowners find themselves pondering the big question: Should I sell my home or stick it out and renovate?

There’s really no wrong or right answer. So much depends on the homeowner’s point of view and the house itself. But here are some factors that may tip the scales.

The math may sway you. Sell or renovate? If you’re leaning toward selling, but are toying with making upgrades to increase the sticker price, know this: A major renovation won’t always spell a big payoff.

“My wife and I just went through this debate,” says Bennie Waller, a professor of finance and real estate at Longwood University in Farmville, Virginia. They did their due diligence and collected estimates, but realized renovating would be very expensive. “We didn’t think we would ever be able to recoup the cost of the investment when it came time to sell,” he says.

So they decided to buy a new house – and keep the old one so they could rent it out for another income stream.

“I examined the decision purely from an investment perspective,” he says.

Or the math may not matter much. For some people, a house is their home for keeps. If you feel like staying put as long as you can, so that someday your adult kids can decide if they’d like to move in or sell their childhood home, recouping renovation costs may not matter to you. Especially if you’re young and plan to spend decades there.

Indeed, sentimentality can be a strong motivator to stay. Take it from Tracie Hovey, a Greencastle, Pennsylvania, resident and the president of a public relations and advertising firm. Though she has only lived in her house for a few years, she has no desire to pack up and go anywhere. She and her three children moved into the house when she remarried. Her husband had two of his own kids, and so they now live under a roof with five kids, ages 15 to 21. There are good memories here, and Hovey says they like their neighborhood and neighbors.

Still, it can get crowded. “We are short one bedroom when all the kids are home,” Hovey says. But it’s outside the house where the trouble really begins, especially during the summers and holidays, when the kids are on break.

Image result for images of renovate or sell

“When they are all home, it makes getting in and out of the driveway impossible, and I often find that I’m moving two cars just to get out of my garage,” Hovey says. Some of their kids end up parking on the street, which, she says, “can be irritating for our neighbors. It looks like we’re constantly having a party.”

So Hovey and her husband, a business executive, are currently shopping around for home contractors, hoping to build a three-car garage alongside the house and turn the existing garage into a master bedroom. She admits they’re a little nervous the home improvements might put the house above and beyond the value of neighboring homes, which could increase the pain come selling time.

It’s just one of those unwritten rules of real estate; it’s always easier to sell a house when it’s around the same price as the neighboring homes.

“But we aren’t the most expensive house in the neighborhood, even with the addition, so I think we would be all right,” she says. Plus, other houses in the area have three- and even four-car garages, so their home won’t be dramatically different than the others in the neighborhood.

You could buy and then renovate. That’s what Cosmo Macero Jr., a public relations consultant in Belmont, Massachusetts, did. His house seemed really large when it was just him and his wife. After two kids, it seemed a little smaller. When they decided to bring in Macero’s 89-year-old mother three years ago, they realized they had to make a change. They weren’t just housing another adult, but one with health care aides dropping by regularly.

But the cost of renovating was punishing. So Macero toyed with the idea of renovating his mother’s home and having them all move in there. That, too, was wildly expensive, and it didn’t feel like it would be a good investment. Macero’s main concern was spending a lot of money on improvements that wouldn’t be seen as improvements by anyone else.

“They might have become money pits for the sake of creating a living space that might feel very customized [and unappealing] to a buyer years down the road,” Macero says.

So he ended up leasing his home, since the market wasn’t great for selling, and purchased a new house with a vacant dentist’s office attached.

A dentist’s office? It sounds like the last thing a homeowner would want, but not in this case. “That office became the object of a major renovation that turned it into a wonderful in-law suite for my mother,” says Macero. His mother, now 92, loves her suite, which has its own entrance, thanks to its former purpose, and Macero believes the suite will be a selling point in the future.

Natalie Gregory, a real estate agent in Decatur, Georgia, took a similar path. She considered renovating her house but instead bought another one – and then renovated that.

“I work from home and wanted to have a basement where I could have a dedicated office, as well as a play room and media room for the kids. So we specifically looked for a home with a basement and a lot that would allow for expansion,” Gregory says.

She didn’t renovate her old house because it was built in the 1920s, and major changes would have adversely altered its character. The added amenities of a dedicated office, play room and media room, she says, would have added more to the home’s value and would have likely made it more difficult to sell in the future.

“You want to make sure you still have the value in your home,” Gregory says of considering a major renovation. “Some homes are what they are. It is right the way it is. For instance, if a home is a great two-bedroom, one-bath, maybe it needs to stay that way and you pass it on to the next people who need just that.”

So should you renovate or sell? Really, you could say it comes down to your frame of mind – and the frame of your house.

SOURCE: USNEWS.com  March 6, 2015 | 10:50 a.m. EST

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Canadians plan to spend $17K on renos this year

home renovation

Source: Money Sense

by Alexandra Posadzki, The Canadian Press May 8th, 2015

TORONTO – When Corinne McDermott’s mortgage came up for renewal, she and her husband considered moving.

“We always thought this house would be our middle house,” McDermott said of the east-end Toronto abode she shares with her husband and two kids.

But sky-high home prices, hefty realtor fees and land-transfer taxes deterred her. Instead she’s opted for a large-scale renovation — including building on a three-storey addition with an ensuite master bathroom and a walk-in closet — to the tune of roughly $150,000.

“We’re creating our dream home, that we plan on never leaving,” McDermott said.

Renovation contractors say soaring home prices in Toronto and Vancouver are encouraging many homeowners to pursue renovations instead of shopping for new homes.

“They can’t afford to buy new, so what they’re doing is they’re improving the living spaces that they’re in now,” said Jon-Carlos Tsilfidis, the renovators council chair at the Building Industry and Land Development Association.

According to a poll released by CIBC (TSX:CM) on Thursday, Canadian homeowners plan to spend an average of $17,142 on renovations this year, with basic maintenance such as painting, flooring and replacing appliances coming in as the top category for planned repairs.

However, that’s down 13 per cent from last year, when homeowners planned to spend $19,754 fixing up their houses.

The telephone poll of 1,020 Canadians conducted by Nielsen Consumer Insights is considered reliable within 3.1 percentage points, 19 times out of 20.

In Toronto, however, contractors say demand for renovations shows no signs of waning.

“I can attest to the fact that we’ve never been busier,” said Brendan Charters, development manager at Eurodale Developments.

Charters attributes the renovation boom to rock-bottom interest rates and soaring home prices, which mean that many people who bought properties years ago, when they were cheaper, now have excess equity in their homes.

In addition, many professionals who work downtown are migrating towards the city core, where many of the homes were built between the 1930s and 1950s.

“We have a very aging housing stock in Toronto that is ripe for renovation,” Charters said.

Some contractors say weakening demand in western provinces like Alberta and Saskatchewan, where housing markets have been hurt by the declining oil price, are likely dragging down the national average.

“Canada is so diverse from coast to coast,” Charters said, noting that piping-hot real estate markets in the Greater Toronto Area and Vancouver are quite different from the remainder of the country.

Brent Ballash, owner and managing director of Calgary-based Amorea Designs, says consumers are certainly spending more conservatively as a result of massive layoffs in the oilpatch.

However, that could also end up boosting renovation spending since many homeowners would rather fix up their homes than purchase new ones during such uncertain times, he said.

“Our experience is that people feel safer staying put and reinvesting in their current home when things are uncertain,” he said.

— Follow @alexposadzki on Twitter