The average Canadian love owning their home. If you happen to be hooked on shows such as Property, Brothers, Love It Or List. It, or Holmes On Holmes, you know, quality renovations can pay off big when you sell, so updating your kitchen to gourmet status, opening up the floor plan, and investing in costly remodels seems like the thing to do. But, is it?
In Canada, money is cheap, and banks are willing to lend money to homeowners. If you are a baby boomer or senior citizen, there are several things you should think of before you go running to the bank to upgrade your home to make it livable for years to come. Not all renovations give you a great return on your investments.
Renovation Spending At An All-time High In Canada
When you look ahead to see where you want to live in a few years, borrowing to make the house suitable for aging in place seems like a great idea when the banks are making it easy. Recent statistics show that Canadians spend about $64 billion last year on a renovation, a figure that is double yearly expenditures in the late nineties and equal to about 4% of Canada’s GDP.
This spending reflects an extremely vibrant housing market, full of buyers who are willing to pay more to get a house in a desirable area that has popular upgrades. Some economists fear that either an increase in interest rates or a decline in housing prices will leave would-be sellers left with houses that are overpriced for the market. No one wants to owe more than the value of their home.
Will Your Renovations Increase The Value Of Your Home?
While it is generally true for any home that has been renovated, the chance that you as the seller might not get a good return on your investment increases along with the amount you spent. If you added improvements that cost $80,000 in hopes of adding another $100-120,000 to the selling price, you might not get back any of your investment should the market tank.
Some renovations that homeowners add to their age in place property like ramps and walk-in baths pose additional problems for home sellers. While home buyers might be enthusiastic about buying a home with a first-floor master or new granite counter-tops, custom, dark wood cabinets, and stainless appliances, they may not want a ramp or elevator, lower counters, a walk-in bath, or other adaptations specifically made to accommodate disabilities or mobility issues. Upgrades like this can actually lower the value of the house. Transforming a property and removing these modifications can be costly to the seller or buyer. Who will pay for it? A huge unsightly ramp could detract from your home curb appeal and repel buyers.
Does Renovation Make Sense versus Selling Your Home?
When you are at a crossroads of deciding whether to sell your home or invest in renovations, these concerns can be boiled down to three questions that you need to ask yourself:
Are your desired renovations in line with what others in the neighborhood have done? Will they keep your home competitive without overpricing your home?
Are the renovations you want and need to make ones that would help or hurt your chances of selling a home, regardless of the market?
Would you be better off taking advantage of the current housing boom, selling your home, and relocating now to a place in line with your needs?
Homeowners need to ask themselves these questions, getting the answer right is especially important for seniors. For help in evaluating your housing choices, contact Roy Thomas, who can give you the facts and help you sell your home. If you are ready to sell your home for maximum value, the best place to start is by clicking here and scheduling an appointment.
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|Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991 Roy specializes in helping retirees with their later in life real estate transactions. If you are contemplating a move and would like a complimentary copy of Roy’s guide to downsizing entitled “Preparing to Downsize” please click here|