August 25, 2015 Leave a comment
Adapted from The Daryl King Team – http://www.darylking.ca
Often, renovating can be a great way to increase the resale value of your home. While it may not always be possible to recoup the full cost of renovations, upgrades and improvements to your home can speed up the selling process and ultimately earn your property a higher price tag. And then of course, there’s also the added advantage of being able to enjoy the updated space yourself for a certain time if you renovate before putting it on the market.
But in some cases, renovations can be disadvantageous. Not only will they not substantially increase your bottom line, they could actually decrease the value of your home if they give potential buyers a negative first impression.
Some buyers might be inclined to make changes to the property themselves until it is to their liking, or are willing to look the other way on features they don’t like if the other benefits of the property outweigh the down sides… for example, a highly desirable location. But if many similar homes nearby are also on the market, your supposed improvements might cost you a sale.
If you don’t plan on keeping your home forever, it’s generally best to keep your renovations tasteful and neutral to ensure they will appeal to the broadest possible selection of potential buyers when it comes time to put your property on the market. In a 2015 Cost vs. Value report conducted by Remodeling magazine, it was found that the renovations that bring the greatest return to sellers are new entry doors, new garage doors, and a new stone veneer exterior. Conversely, additions of a sunroom or of a bathroom and remodeling to create a home office were found to bring the smallest returns.
Below are some examples of things you could do to your home that might damage its selling price and make it stay on the market longer.
1) Converting a garage: Though converting a garage into an alternate living space can be a cheaper alternative to building an addition, many buyers would still prefer the original garage to an extra room. This is especially true in cold and rainy climates, where the room will never warm up properly.
2) Eliminating a bedroom or a powder room: Since many of today’s homeowners prefer large, open spaces, combining an older home’s smaller rooms into a larger living area might add to the property’s overall value. However, turning a bedroom into a walk-in closet, or creating a large master suite by combining two bedrooms, could harm the value of your home, as you are losing out on living space. It is almost never a good idea to eliminate a powder room… think of your guests’ comfort!
3) Personalizing too heavily: We all want our homes to reflect our personalities. But if you bring touches to the property that are too precise or unique, such as customizing the space with unconventional furniture or appliances, remember that such changes may not appeal to everyone.
4) Adding too much colour: If you’re a fan of colourful walls, be prepared to paint over them in a neutral tone when it’s time to put your home on the market. Everyone has strong preferences when it comes to colour, and potential buyers can easily be put off by anything too bright or striking. Neutral colours are a simple way to avoid a negative first impression.
5) Putting in a pool: We don’t all live in year-round sunshine. If your home’s location is subject to cooler and more volatile weather, it is less conducive for a pool. They can be costly and a source of hassle for their owners who have to close their pools during colder months, and re-open them every time the seasons change. Knowing this, potential buyers might not view a pool advantageously, seeing only the additional upkeep/maintenance costs instead!
6) Renovating without a permit: Permits for major, and sometimes even minor, renovations are required in almost every municipality. Therefore ensure that all improvements to your home are up to code. Ask to be provided with copies of permits – particularly discerning buyers will know to ask about them, and inspections are mandatory in some cities before a home is sold. Unpermitted renovations can ultimately incur additional costs if the city issues a fine or later decides the work needs to be redone.