Many of homeowners’ most common complaints can be solved with a renovation – often at a fraction of the cost of moving.
A new home can be awfully seductive; those clean, modern lines, fresh paint and new fixtures often make people want to kick their tired, well-worn homes to the curb and run screaming for the suburbs. But before you ditch your old home in favour of a new one, consider renovating the one you’ve got. According to Farhaneh Haque, Director of Mortgage Advice at TD Canada Trust, renovating can help you fall in love with your old home all over again – and cost you a lot less than leaving it behind. If you do it right, that is. Here are some things to consider...
Why do you want to move?
As appealing as a shiny hardwood floor or new granite countertops might be, renovating isn’t the miracle-cure for all that ails you about your home. If you can’t stand your neighbourhood, even the most luxurious updates won’t keep you happy for long. That said, renovating can do an awful lot to make an old home feel new. If you’re hankering for an updated look, more light or a more functional space, a few key renovations could be all you need to bring the old pride of home ownership back in full force. Some home owners even build additions, or update their home in terms of energy efficiency. So, before you’re wooed a newer – or even just larger – home, consider what bothers you about where you live now and whether you can fix it.
Consider the cost of packing up
Thanks to TV home renovation shows, we all know that the cost of making an old home look new can add up faster than calories at Christmas-time ($50,000 bathroom anyone?). What we often forget, however, is that moving is far from free. Once you add up the cost of mortgage prepayments, realtor commissions, lawyer fees and moving services, you can be in for thousands of dollars. That pesky real estate market may also be a factor; if you don’t move at a good time, you may not be able to capitalize on the sale of your current home. Plus, once you get in your new home, you’ll want to give it your own style (and perhaps ditch your old furniture for something more suitable).
Simple renovations, on the other hand, can often be relatively inexpensive. Just be sure to do your research and stick to a pre-approved budget. Plus, renovating, you’ll be increasing the value of your home so that it’s worth more when you actually do sell.
What to fix
Okay, so here’s another problem with renovating: You decide to renovate your old kitchen, but once you do, it seems out of place. So you move on to the next room. This ‘renovation-itis’ can eventually spread to your whole home, until everything is brand new – and your pocketbook is bone dry. That’s why deciding what renovations will benefit you most and setting a budget to get them done is essential.
Haque says today’s trending renovations include new kitchens, main-floor laundry rooms and home theatres. But keep in mind that some renovations will boost your home’s value more than others; if return on investment is a major consideration for you, stick to fixes with a reputation for high returns. You can check out some estimated returns on 25 common home renovations using RENOVA, the Appraisal Institute of Canada’s Web-based guide to home improvement values. If you’re considering a major overhaul, include an appraiser and/or architect in your plans.
How to pay
When it comes right down to it, most of us have a (rather long) wish list of things to make our homes more beautiful, more comfortable and more, well, us. Fortunately, part of the benefit of being a homeowner is that there’s equity available to pay for some of those things, according to Haque. Think of it like an investment: you dip into your home’s equity to help boost the value of your home even more. Other options include a secured or unsecured loan, or for small changes, even a credit card (provided you can quickly pay it off). And of course, the best option is always cash. To make sure you can make ends meet, Haque recommends sitting down with a mortgage advisor to discuss your options, preferably before you start tearing down walls.
“At the end of the day you have to pay for it somehow and you have to make sure you’re not overextending yourself,” she says.
Time to move on?
Looking to ditch your old house in favour of a fresh, new abode? Sometimes, skipping out on your home is the only cure for residential dissatisfaction. Sometimes though, all it takes is a facelift to help you see your old home in a whole new light.