Tag Archives: home renovations

Seven Renovations That Could Backfire and Hurt Your Home’s Value

If you live in an area where homes are selling like hot cakes, you may be feeling exceptionally confident in the value of your property. And as a result, you may be considering a home upgrade you’ve been dreaming of for years. Perhaps you want to add a pool, or maybe you want to add more square footage to your home. Or maybe you’re just aching to do something because you’ve been watching way too much HGTV.

Before you dip into your savings account or apply for a home equity loan, experts say you should think long and hard about your financial investment and your choices. Just because a specific upgrade seems like a good idea right now doesn’t mean it will pay off later. Plus, there are some upgrades that many homeowners regret almost instantly, either because they wind up overspending or because were a bad idea in the first place.

Seven Home Improvements You May Live to Regret

Home remodelers, beware. Spending money to “upgrade” your home doesn’t always pay off, and it could even hurt your home’s value in the long run. Here are some upgrades the experts suggest you steer clear of:

#1: Garage conversion

A garage conversation can seem like a good idea if you need more living space and don’t mind parking in the driveway or street. However, this remodeling project comes with plenty of risk. Not only are garage conversations often done poorly and in a way that makes them look obvious — and awkward — but you can face problems if you remodel your garage without getting proper permits.

Vincent Nepolitan of Planet Home Lending points out another potential problem: When you go to sell, you may find a more limited pool of potential buyers. Not having a garage for buyers to park their vehicle can limit the number of people you get through the door, thus preventing you from getting the sales price you want for your home. This is especially true in areas where all the neighboring homes have garages, Nepolitan says, and in areas with hard winters or sizzling-hot summers.

#2: Converting a bedroom for another purpose

With more people working remotely than ever before, it may seem like a good idea to convert a spare bedroom into an office. This can be a good idea if you only make superficial upgrades like replacing a bed with a freestanding desk. But there could be financial consequences if you pour a lot of resources into the renovation or make structural changes — converting the closet into a built-in desk area, for example — so the room no longer qualifies as a bedroom afterward.

The reason for this? Homes with more bedrooms can fetch a higher sales price and tend to attract a larger pool of buyers, says Georgia-based real estate investor Shawn Breyer. A buyer with two children might insist on having three bedrooms, for example, and be unwilling to consider any two-bedroom homes. They might also be willing to pay a premium to secure a home with a fourth bedroom they could use as a guest room.

The bottom line: When it comes to a home’s value, the more bedrooms the better — so don’t think long and hard before getting rid of one.

#3: Adding a pool

It’s easy to think having a pool would make your life more fun and more relaxing. After all, what’s better than spending a lazy day floating in the water with a cold drink or a good book?

Unfortunately, the reality of pool ownership doesn’t always line up with expectations. Pools may be great for summer, but they’re often expensive to maintain over the long haul, says CEO of Patch Homes Sahil Gupta, and require a lot of work, from adding chemicals to cleaning and maintenance.

And, you may not find your pool quite as fun in a few years’ time. Gupta notes that pools tend to go unused during winters and once kids leave the house, and that they may eventually become a safety hazard for grandkids or pets. (In fact, a pool can increase your home insurance premiums.)

Finally, only a limited number of buyers will even want a pool in certain parts of the country, so you might wind up selling your home for less than you wanted or waiting longer for a buyer as a result.

#4: Kid-related upgrades

While pools are commonly added by families with kids, there are other kid-related upgrades homeowners may rush into without thinking them through, says Julie Gurner, senior real estate analyst at TheClose.com. “Some upgrades consumers tend to regret are, for example, linked to children and their temporary place in the home,” says Gurner.

A solid example would be adding a basketball court to your backyard because your child is really into the sport. “Sports courts require maintenance and take up a large portion of the backyard recreation space,” says Gurner. And not every buyer will want a basketball court in their yard when you go to sell.

Before you go through with a costly upgrade that may only be needed for a few years, consider whether there are less permanent and less costly options available.

#5: Trendy interiors

Gurner points out another mistake that’s often fueled by HGTV mania — following fads and planning your home upgrades around what’s currently “hip.” Gurner points to the recent shiplap craze as an example, noting that the wooden-board wall cover that’s trending now may be the “wood paneling of the future.”

Other ubiquitous home improvement trends that could leave you wincing at your choices later on include stainless steel appliances, open kitchen shelves, brass accents, and basically anything that’s shabby chic. When it comes to fashion and trends, whatever’s “in” now is always on its way out at some point.

#6: Textured walls and ceilings

Speaking of outdated trends: Textured walls are so 1980s, but some people who never got the memo still slap a layer of popcorn on before they paint, even if it’s just to match other rooms in the house. But Breyer says that adding texture to walls and ceilings is a mistake — partly because it can turn off potential buyers when you go to sell, but also because it’s expensive to remove if you change your mind.

Breyer says that, most of the time, it costs $1 to $2 per square foot of space to have textured walls refinished with a smooth surface. Plus, you’ll also face the cost of repainting your walls and/or ceilings after the removal is complete.

#7: Over-improvements

Real estate agent Justin Moundas says that over-improvements tend to leave homeowners regretting their choices. “It never pays to be the nicest or biggest house on the block,” he says. “Often people regret investing so much into the home that it can’t be justified in the resale value for the area.”

According to Remodeling Magazine’s 2018 Cost vs. Value Report, some remodeling projects that don’t offer a great bang for your buck include big-ticket investments like backyard patios (47.6% return), a master suite addition (48.3% return), a major kitchen remodel (53.5% return), and the addition of a bathroom (54.6% return).

Each of these projects may help you enjoy your home while you live there, but they may leave you wishing you had spent your money elsewhere if you move within a few years.

If you want a home that’s a lot nicer than the one you have now, Moundas says upgrading to a different home can be a better deal than remodeling. By finding a different home that already has the floorplan and upgrades you want, you can avoid the hassle and stress of remodeling along with runaway costs.

The Bottom Line

If you watch popular real estate shows on HGTV all the time, it’s easy to think that home remodeling projects always pay off. After all, the stars of shows like Flip vs. Flop and Fixer Upper almost always turn bargain basement homes into spectacular investments, mostly by choosing the right upgrades and getting them for the right price.

But real life is not like television. In the real world, home upgrades are usually only a good idea if you plan to stay in your home and pick finishes that would appeal to the masses if you needed to sell.

Before you spend your hard-earned dollars on a pricey remodeling project, ask yourself what your goals are. Do you want to enjoy your chosen upgrades for years to come? Or are you simply following trends and keeping up with the Joneses? Do you absolutely need to upgrade to make your home livable, or could you get by with the home you have?

Be honest with yourself, and you may find a home upgrade is the last thing you need.

Source:  The Simple Dollar –

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Advertisements
Tagged , , , ,

Top five home renovations that increase property value

home renovations, increase property value, Income properties, real estate, real estate wealth, real estate income, Genworth Canada

Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment 5-6x what they cost.

#5 Flooring

Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.

home renovations, increase property value, Income properties, real estate, real estate wealth, real estate income, Genworth Canada

#4 Fixtures

Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your home’s value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.

#3 Bathroom

The bathroom is the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a 3-piece bathroom under a staircase – the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.

#2 Kitchen

Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh and desirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.

#1 An Income Suite

No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting your basement into a rental, or another floor in the home, an income property will increase your home’s worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive – which creates real wealth that can supplement your income.

Source: Genworth Canada

Tagged , ,

We recommended our contractor to friends and they hated his work. How can we repair this mess?

THE QUESTION

My husband and I recommended a contractor to friends of ours and they didn’t like the work he did. They not only bad-mouthed him but they also refused to pay. Now he’s upset with our friends, our friends are upset with us and we’re upset with our friends. I’m wishing we never recommended our guy (who has always done great work for us) in the first place. Please help! What do we do now?

THE ANSWER

I hear you. Similar scenarios have played themselves out in our lives a few times and, yes, it is upsetting – to the point where I’ve decided my new policy is not to recommend anyone to anyone anymore.

Why bother? It’s a mug’s game! If it works out, fine. But if not – everyone gets upset.

Example: We had “a guy,” and he always did good work for us. So we recommended him to a friend who, as in your case, not only wound up bad-mouthing him but also stiffing him, financially, for the work he did.

She had some story about how he tried to rip her off. Excuse me, we knew this guy for nearly two decades, and during that time he was in our house more or less constantly, like Eldin the painter from Murphy Brown, if you remember that show. Anyway, I/we knew him backward and forward and inside and out and knew he was above board and would never rip anyone off.

Long story short, I am no longer friends with that (ex-)friend.

Now, I’m not saying be like me and turn your back on your friend. But I truly hate it when someone stiffs an honest, hard-working person.

Of course, you can stiff people. That possibility always lurks in the do-work-now-pay-me-later arrangement.

But to me, it’s like “dine and dash” (where you eat in a restaurant then scamper off into the night before the bill comes): it sucks because civilized society is based on people trusting other people not to do that.

Except “reno and dash” is even worse because (at least in the case of my ex-friend) we’re talking not about hundreds but tens of thousands of dollars – money our (former) contractor could have used/needed to put food on his family’s table.

STORY CONTINUES BELOW ADVERTISEMENT

And that’s serious, a.k.a., not a joke. When you mess with someone’s ability to earn a living, that is a profoundly uncool thing to do.

So I think you’re well within your rights to speak to your friend, to the effect of: “Hey! What’s up with stiffing [name of contractor here]? That is completely uncool, not only in its own right but also because it reflects on me.”

Not only does it reflect on you, (you could furthermore add), “But now I have to deal with it. I have to apologize to him for hooking you up with him in the first place.”

Expect some backlash. I gave a similar speech to my former friend (the one who stiffed our contractor), and it led to a friendship-ending conversation.

I’m not suggesting you follow my example there (I’m always an advocate of hanging on to friends and all loved ones through thick and thin). “Do as I say not as I do” would be my watchwords in this circumstance.

But I wouldn’t let your friend off the hook too easily. Ask yourself: “What kind of person refuses to pay for work honestly, even if perhaps not-so-wonderfully, performed?”

I’ve had people do work for me I wasn’t crazy about, and I wasn’t crazy about their work-ethic either.

Some of them were just unreliable. A guy who built a set of bookshelves for us comes to mind. He was all like, “Tra-la-la, I’ll come at 10 tomorrow,” and then just wouldn’t show up.

But the bookshelves got built in the end, and it never occurred to me to stiff him, to look him in the eye and say: “You know what, the whole experience was a pain and I’ve decided I’m just not going to pay you.”

I think you should seriously ask yourself if you want a friend like that, and beyond that (even though I’m an advice columnist), I’m not going to tell you what to do, except to say: comport yourself accordingly.

Source: SPECIAL TO THE GLOBE AND MAIL

Tagged , , ,

Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value.

home renovations, increase property value, Income properties, real estate, real estate wealth, real estate income, Genworth Canada

Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment 5-6x what they cost.

#5 Flooring

Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.

home renovations, increase property value, Income properties, real estate, real estate wealth, real estate income, Genworth Canada

#4 Fixtures

Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your home’s value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.

#3 Bathroom

The bathroom is the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a 3-piece bathroom under a staircase – the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.

#2 Kitchen

Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh and desirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.

#1 An Income Suite

No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting your basement into a rental, or another floor in the home, an income property will increase your home’s worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive – which creates real wealth that can supplement your income.

Source: Homeownership.ca

Tagged , , , ,

Top five home renovations that increase property value

Looking to increase your homes property value? Here are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment 5-6x what they cost.

#5 Flooring

Flooring is one of the most important aspects of your house. You will see an immediate rise in property valuation with the installation of hardwood floors. Existing hardwood floors that you can refinish are ideal as they are less costly to restore and in higher demand than new flooring materials. For the bathroom, tile will always be in demand and retain value exceptionally well.

home renovations, increase property value, Income properties, real estate, real estate wealth, real estate income, Genworth Canada

#4 Fixtures

Kitchens often look tired and dated, in large part due to old fixtures. Replacing or updating cabinet hardware, light fixtures, countertops and faucets will result in an immediate increase in your home’s value. This small, but effective upgrade will also revitalize the entire home. Pot lights are in high demand in open concept style homes.

#3 Bathroom

The bathroom is the second most important room in the home in terms of valuation. If you can add a three-piece bathroom to a home with only one full bathroom, you will see a dramatic rise in the market value of your home. While you should never compromise bedroom space for a bathroom, try sneaking one in dead space in the home. Scott managed to fit in a 3-piece bathroom under a staircase – the width of the room measured just 44 inches. As an added tip, use glass for the shower to make the bathroom feel more spacious.

#2 Kitchen

Kitchens are the single most important room in the home relating to valuation. The kitchen can make a significant difference in the value of your home. As such, it is crucial that you invest in having a modern, fresh and desirable kitchen. Modern cabinetry, under cabinet lighting and new appliances will all significantly increase the value of your home on the market. To save on cost without compromising construction and desirability, look at options like Ikea cabinets as opposed to custom cabinetry.

#1 An Income Suite

No surprise, but the single biggest way to increase the value of your home is to build an income suite within the property. Whether this is converting your basement into a rental, or another floor in the home, an income property will increase your home’s worth. The main reason for this is that it covers a portion, or sometimes all of your mortgage payments, and results in your home being cash flow positive – which creates real wealth that can supplement your income.

Source; HomeOwnership.ca

Tagged , , , ,

How much should it really cost to renovate a kitchen?

kitchen renovation

It can cost between $25K-$50K. Here are pointers to help you figure out a budget

My kitchen renovation last year was filled with surprises, most of them unwelcome (after all, our house is 100 years old). But by far the biggest surprise was the cost: After an initial meeting with our designer, we realized we needed to rethink our budget and come up with more cash (about 30% more on top of what we’d planned).

Turns out I’m not alone: Experts say most people don’t realize how much a kitchen renovation will cost and, as a result, they don’t tend to budget enough.

That could be because home renovation TV shows are notorious for showing unrealistic budgets for major work — so while a family might get a brand new kitchen for $20,000, it’s never explained what that price includes.

So how do you figure out what you should be spending?

Nancy Peterson, Founder and CEO of Homestars, a website that connects consumers with contractors and other home improvement professionals, says that, according to their data, the average kitchen renovation in Canada costs $25,593 — but, she adds, that number depends on how extensive the work is and whether you’re doing an outright gut of the space and replacing everything with new stuff. “A major renovation can cost as much as $50,000,” she explains, “especially if you’re buying high-end appliances or cabinets, which are by far the biggest expense in any renovation.”

So how much should you budget for your home renovation? Here are some pointers to help you figure it out:

Know where your money is going

Whether it’s cabinets, tiles or appliances, it helps to know how much each element of a renovation will likely set you back. Here are the top things you’ll be spending on, according to Peterson, including what the average Canadian spends on each during their renovation:

• New cabinets and countertops: $7,483.16
• Wood flooring: $6,392
• Stone countertops: $3,839
• Cabinets (refinishing): $3,819
• Ceramic flooring: $2,333

The 20% rule

Experts say to add between 20% and 25% on top of your budget to handle surprises and unexpected costs. Based on the average cost of a Canadian renovation, a healthy buffer would be $5,118 to $6,398 to cover anything that pops out of the woodwork (in our case, it was an old stove pipe lurking behind our kitchen wall — big bucks to get rid of that, and it put us off schedule to boot!).

 

You don’t have to splurge on everything

Depending on how you use your kitchen, there are some things you can do on the cheap and others where it might be worth spending more. In our case, we splurged on a high-end stove (we cook all the time), but we bought pre-made cabinets from Ikea. Peterson also recommends saving money by refinishing existing cabinets instead of replacing them. Flooring selection can also make a difference – ceramic is a lot cheaper than wood.

You’ll be eating out more

Remember, you are going to be without a kitchen for a month or longer. That means cooking will be limited – and you’ll probably be relying on prepared foods and restaurant meals more than you usually do. Be prepared to spend a bit more to feed yourself and your family while your space is shut down.

Source: MoneySense.ca – by  

Tagged , , ,

Move or improve? – Before embarking on an expensive move, consider renovating instead

Home Reno Guide banner V4

When my husband and I first bought our house in Guelph, Ont., 11 years ago, it was something Goldilocks surely would have approved of: not too big, not too small. Just right. Our first-born was still in diapers. Who needed a second bathroom? Then, seemingly overnight, the place felt cramped and entirely impractical. We’ve now got two kids, and our-nine-year-old has outgrown her teeny-tiny bedroom. Weekday mornings mean slapping together breakfasts in the cramped kitchen. And forget inviting more than one family over for dinner unless they don’t mind yelling over the din. (Basement play room? What basement play room?)

Not surprisingly, my husband and I have been discussing our options. Move to a larger, more suitable home in our neighbourhood or stay put and renovate what we have? Finish the basement or build an addition? And most importantly, what would each scenario cost?

I’m hardly the only Canadian faced with the choice between moving or improving to increase usable square footage. Back in 2012, Canada Post released numbers indicating that of the 850,000 people who changed addresses, 37% moved to upgrade their home for family reasons. More recently, Altus Group measured the boom in Canadian residential home renovation spending, valuing it at $68 billion in 2014, roughly $20 billion more than what was spent on new builds.

Families grow, possessions multiply, aging parents move in, or a new job means building a home-office space. Although everybody’s situation is different—and let’s face it, you can’t always buy a great neighbourhood but you can change your home—deciding to love it or list it usually comes down to finances. What will it cost to move versus renovate and stay?

It’s not the house, it’s you

Cut the clutter and uncover valuable unused square footage

First, let’s start with the biggest bang for the least bucks: creating more usable space by simply clearing out the junk and getting your house more organized. That’s been our own family project for the past few weeks. Snowshoes that have never seen powder? Gone. An ill-advised yogurt machine purchase? Ditto. Three boxes of baby shoes? Now that’s just embarrassing.

We decided to take on this Herculean project after chatting on the phone with Elinor Warkentin, a Vancouver-based professional organizer who runs goodbyeclutter.ca. She says some clients have hired her to stage their homes for selling, only to decide to stay put after uncovering unused square footage they never knew they had: “Sometimes people can’t see the forest through the trees. Decluttering and organizing give people a lot of clarity.”

Although the act of breaking up with unwanted belongings is free, tackling chaos can be overwhelming without some help. Hiring a professional organizer can be one of the most cost-effective ways to gain much-needed space—with no jackhammer or moving van required.The least expensive option

In order to command her $85/hour fee, Warkentin spends 15 minutes on the phone with potential clients to suss out their junk issues, then does a two-hour walk-through consultation, giving specific advice based on what she sees. While she may recommend storage solutions—anything from new shelving beneath the stairs, to under-the-sink storage hacks for soap and rags—she also tackles behavioural issues. Toys littering the floor? Maybe it’s time to teach the kids to pitch in and clean up. And yes, like all those clutter consultants on TV, she helps clients separate items into piles: some go to the garbage heap, others will be given away and the last pile are keepers. She’s on-site with bins and garbage bags, picking through items one by one. (Warkentin once spent hours matching up single black and navy socks for a client.)

Between hiring a professional organizer’s services and installing new storage solutions in previously unused spaces, expect to spend $2,000 to $10,000, depending on where you live and whether your new shelves are cheaper prefabs or pricier customs. If that sounds unreasonable, consider that “for every box of clutter you remove from your home, you increase the equity by $500,” Warkentin says. But think hard before building new pricey storage solutions if you don’t like your neighbourhood or hope to move to a new school district someday. There’s no point spending the money if you’re just going to sell anyway.

Luckily, there are a number of options that range from cheap and cheerful to extreme and expensive that could get you a house that works for you. Here we’ll take a look at four scenarios, from least to potentially most costly, to see how each choice adds up.

Building a better house

Renovate the existing space make a house feel more spacious

Earlier this year, Scott Sheppard, an air traffic controller living in the Greater Toronto Area, decided it was time to give his mother, who lives in his basement, a room of her own. A bathroom, that is. “As she’s been getting older, we’ve realized that we needed to build something for her, rather than expect her to walk two flights of stairs to use the shower,” says Sheppard. In the end, it was a relatively easy fix: They simply converted their old attached garage into a laundry and mudroom, and moved the basement’s washer, dryer and deep freezer into it. This freed up space for Grandma’s corner shower, sink and toilet.

The second-priciest option David Kloss, co-owner of LoganSienna Design in Toronto, says that, for homeowners like Sheppard, it makes sense to maximize space with the footprint that you have—particularly if living in a semi-detached or row house with restrictive zoning bylaws. Moving a wall to, say, create two bedrooms out of one means you can stay in a home you love, while making it fit your lifestyle. And even if the house doesn’t become physically bigger through these renovations, a little ingenuity can go a long way toward making a house feel more spacious. For instance, at a recent reno job in Toronto’s High Park area, Kloss removed a hall linen closet and knocked down walls to create a bigger, more open washroom.

And don’t forget the attic. It’s a square footage gold mine, particularly in older homes with steeply pitched roofs. To determine if you can turn your attic into a usable loft, shine a flashlight up there. Got W-shaped trusses holding up the roof? The reno will likely be too costly to be worth it. But if you’re looking at a wide open space with ample headroom in the centre, it might be worth building stairs up through a closet, and adding insulation and heating ducts.

Not all spaces are appropriate for renovations, however. Even though adding a room in the basement typically saves you between 25% and 50% of the cost of adding a room to upper floors, some aren’t worth finishing. There are foundation cracks that result in leaks. The furnace is smack in the middle of the room. The ceiling is low. Digging down to gain a few extra feet would cost in the range of $60,000. And to fix everything else? An extra $75,000. That’s before all the fun décor decisions.

All rooms aren’t created equal when it comes to pricing either. Contractors tend to quote in the $90 to $225 per square foot range, but if you’re aiming to add a bathroom to the mix or make your kitchen bigger, expect higher outlays: Plumbing, granite, fixtures and new appliances drive costs way up, while simply drywalling a basement or attic is going to be much cheaper. There are a lot of ways to save money—or blow through cash—so plan carefully before giving any project the green light.

Building a bigger house

Add value and living space to your home with an addition

Michael Berton and Cathie Hurlburt have had 13 years to live with their decision to turn their once small two-bedroom bungalow in North Vancouver into a 2,000-square-foot home by adding a second storey. They couldn’t be happier.

The Vancouver market was just heating up when the couple dragged their kids to open houses looking for a larger home—but eventually they decided to stay put. “We kept looking at houses that were three times more money than ours, were just as old and probably needed renovating anyway. It just didn’t make sense,” says Berton now. Instead, they hired a contractor, convinced the bank to help finance the $200,000 reno, moved into an apartment down the street for five months, and then waited for the plaster dust to settle.

Although hard to fathom today, the couple once worried about owning a half-million dollar home in Vancouver. But the gamble to increase the space paid off. Not only were they able to raise The third-most expensive option their three girls in a spacious home, but they made their house even more desirable to buyers. Their home—assessed at $320,000 before the reno—is now worth about $1.5 million. “But I don’t know if the math works like that everywhere, because I live in Lotusland where the house prices are nuts,” Berton cautions.

He’s right to question whether building an expensive addition is the best option everywhere. Most house prices don’t appreciate as quickly as they do in hot markets like Vancouver and Toronto. It can take decades before homeowners can recoup costs come selling time. An expensive renovation usually only makes sense if you plan on living in your home for the long haul, says Suzanne Ethier, a realtor in Kitchener, Ont. But for people who aren’t sure if they’ll need to move in five or 10 years? “Without fail, the numbers say sell the house and buy a new one,” she says.

The truth is that building onto a house is expensive. Location, size, finishes and labour costs will vary, says Brennan Waters, owner of Oakwaters Construction Ltd., based in Everton, Ont., but generally speaking, “$200 a square foot will give you options.” But expect to pay more if you’re digging down to expand the basement, or if you’re planning wholesale kitchen moves requiring all new plumbing and wiring.

What’s more, extensions can come with nasty and expensive surprises—from opening a wall to find old knob-and-tube wiring, to having run-ins with neighbours who are fed up with the construction noise and debris. Banks don’t finance the demolition work either, so that’s coming out of pocket, unless you get a construction loan. All of this isn’t to say building an addition can be the right choice, but just be sure you know what you’re getting into before the backhoe arrives.

Making the big move

Upgrade your living space by relocating to a new home

Sometimes you’ve just got to get out of Dodge and find a new place to live. That was Kate Kuok’s story when she moved from her suburban Toronto townhouse to Oakville, Ont., about four years ago with her husband Gabriel and their newborn.

Although their former property had three bedrooms and three bathrooms, soon the baby gear spilled out all over the living areas. Plus, they weren’t enamoured with their neighbourhood, what with drug deals going down on the street. “I always said to myself, ‘I’m going to see how we are with a kid in this place.’ I had my son in June and by August I was saying, ‘We’ve got to get out of here,’” Kuok explains, recalling all the factors that motivated their decision to find a new home.

The most expensive option So what does it cost to move? Put it this way: It ain’t cheap. Even if you clear a cool $100,000 after selling your old home, moving into a larger house will likely cost more than that. Take houses in Halifax’s hot South End neighbourhood. A three-bedroom, one-bathroom home is listed at $465,000. Move up to a similar four-bedroom, two-bathroom house and you’re likely spending about $200,000 more. Plus financing.

And don’t forget the extras. Realtor fees run around 5% to 6% of the final sale price, so count on at least $23,250, while lawyer fees cost $1,200 to $1,500. With the exception of Alberta and Saskatchewan, there are also land transfer taxes, which vary depending on where you live—for instance, you’ll pay $6,475 on a $500,000 home in Ottawa, while Torontonians can expect to pay $12,200 for that same-priced house. Plus, don’t forget moving costs that run additional thousands of dollars.

Despite the financial costs for Kuok’s family, it was a good idea to move. Although the couple spent a little more on the mortgage than they’d budgeted for, they ended up with something money can’t buy: a great low-traffic street with neighbours who look out for each other. You’ll find them on summer nights hanging out in the yard socializing over a beer while the kids whiz around on bikes and scooters. And in the grand scheme of things, that’s just as important as saving a buck.

“I would do anything to stay in this house because we love the street. I would put an addition on it, refinish the basement and make more space for the kids,” Kuok says. “We could never buy neighbours like these again, ever.”

Source: MoneySense.ca – by 

 

Home Reno Guide banner V4

Tagged , , ,