If you’re thinking of undertaking a renovation, make sure you actually add value to your home (and not over capitalise) by taking into account the following –
What are buyers looking for?
You need to understand the area, what buyers the area attracts (i.e. families vs young couples) and what they could be looking for in a property. You don’t want to go to the expense of adding a room to find out later that buyers really don’t want it and perhaps more importantly, they won’t pay any more for it.
You also need to be careful on the extent of the renovations – money spent does not always equal increase in value. It’s easy to get carried away wanting to make improvements that you want for yourself but ones that won’t add any value. Over-capitalization is something quite easy to do and something you want to avoid.
Consider the flow and feel of the home
If you’ve decided to add another living room, consider how it will flow with the rest of the house –both internal and external areas. Poorly thought-out extensions can change the flow of the house and sometimes give the impression they’ve just been tacked on because there was space.
Whilst space will be major factor in what you can and can’t do (and where you can and can’t put additional rooms), you want to ensure that whatever you do is consistent with the rest of the house. This also goes for the style of the extension. Adding in a slick modern bathroom to an otherwise colonial style home will feel disjointed.
Think about street appeal
We’ve all heard the saying, “Don’t judge a book by its cover.” However, we still do it all the time, especially when it comes to property.
Obviously buyers won’t pay a premium for street appeal if once they walk through the front door, they’re greeted by a dilapidated home. However, countless real estate experts will tell you that it pays to ensure the property looks appealing from the outside. A welcoming entrance and appealing front yard give the impression of a house that’s been well looked after, one that potential buyers will want to investigate further and take a look at inside.
Consider the essentials – bathroom and kitchen
Bathrooms and kitchens have traditionally been great ways to add value to a property and it’s generally still the case. Old dingy bathrooms can give buyers the impression there’s underlying issues with the house – i.e. plumbing and/or mould issues – even if these issues don’t actually exist.
It’s not always necessary to do full renovation, but a professional will be able to show you clever ways to utlise the space and create the biggest impact with minimal dollars. For example, adding a skylight, replacing the mirrors and/or the shower screen in the bathroom can create a significant change.
If you decide to throw out everything with the kitchen sink, the experts suggest sticking to neutral colours because they appeal to a broader range of buyers and are less likely to date quickly.
How will you finance it?
There are a few ways you can finance a renovation – cash, equity, increasing your mortgage – depending on your situation and how extensive the renovation is.
