Thursday, March 17, 2011

To Reno or Not To Reno? That Is the Question.

When it comes to selling houses, vendors seem to come in two basic types: those who think that spending a little on renovations will greatly boost the eventual  sale price of their property and those who think their homes are perfect just the way they are.

When it comes to preparing a house for the market, you need to step back and take an objective  look at the product you’re selling. Start by asking whether the place is clean. Next, ask if it is uncluttered. Third, ask if everything works as it should.  Only once you’re able to answer yes to those three questions should you contemplate pre-sale renovations as a way to boost market value. Seriously, a few buckets of soapy water ,  a jumbo box of Hefty Bags and $100 worth of light bulbs might be the most cost-effective investment you can make.

This isn’t to say that renovating isn’t a good investment. The Appraisal Institute of Canada has an online guide that shows the payback value of various home improvements.  You’ll get 75- to 100-per cent of the money you spend on a kitchen reno back, for example. The guide is useful inasmuch as it shows which renos bring the highest return. Getting all the money back isn’t guaranteed, however.

You should ask yourself a few more questions before gutting the kitchen. How’s your wiring? Is the electrical panel big enough? Is the plumbing okay?  Why bother with cosmetics when the fundamentals are less than sound? Sometimes renovating is like putting lipstick on a pig, a lot of effort for not much return.

I decided to renovate the kitchen in my first home knowing that I planned to sell the property within the year. The kitchen had always been the problem room in our house. It had been poorly renovated by the previous owners, the kitchen cabinets were all slightly crooked and the layout was  wrong. In all, I spent about $8,000 on off-the-shell maple cabinets at the local big-box hardware, a melamine counter, new hardware for the sink and labour. We enjoyed the kitchen for about six months before selling.

I dropped by the house to pick up mail less than a year later and was shocked to see my homey maple cabinets gone. The buyers had ripped the whole thing out and installed a sleek European style kitchen in gleaming high-gloss white. 

Was the reno worth it? We had to scratch up the money in the first place and live through a month-long gutting of the home’s nerve centre.  We enjoyed the kitchen but in the end I’m not sure we got any of that investment  back. Chalk it up to ego. I didn’t want strangers seeing how ugly my kitchen was.

Big presale renovations are best undertaken when you possess three precious commodities: time, expertise and money.   If you are living in the property, sanding and refinishing the floors is complicated. If the property is empty, it’s easy and relatively inexpensive.  Go for it.

Painting is easier. Nothing makes a place look more dated than bright accent wall colors. Neutralizing with a warm off white is the way to go. It will make any place look bigger and brighter. Again, it isn’t a costly job but it has immediate impact.

Lighting is another cost-effective fix. I recently had a client whose turn-of-the-century flat seemed quite dark. She upped all her light bulbs to 60-watt  cool whites, as opposed to warm whites  and removed all the fussy little parchment shades from her vintage fixtures. Voilà, suddenly the place was bright, even on the grayest midwinter day.

Dramatic fixtures in the living and dining room can add punch to any home, especially if they replaces weird fixtures from a bygone era. The same can be said of the vanity light in the bathroom. Does it make your reflection look green?  Switch it out. Ditto for switch plates and outlet plates. Are they utilitarian gray or beige? If so, clean white plates cost about $2 each.

The main thing to remember with renovations is that the materials can’t look cheap and the work can’t be shoddily done. If you’re going to undertake renovations, make sure you have the means to do the job well or else you’ll be throwing good money away.

On the whole, I don’t think big renovations are advisable when you’re trying to sell a house. You probably won’t get your money back and you most likely won’t get much opportunity to enjoy the upgrades yourself. Save the cash and put it into your next house, that’s my advice.

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