Sometimes, the heart can overrule the pocketbook
Emotional connections play key role in deciding between remodelling home or buying a new one
When does a home renovation stop making sense and start wasting money?
For veteran renovator Roy Nandram, president of RND Construction, the $500,000 mark should be a red flag to homeowners that building a new home or buying a resale might be a better choice — but there’s no hard and fast rule.
While homeowners Andrew Cameron and Susan D’Antoni didn’t expect to spend over half a million dollars for their Glebe remodel, it’s not something they regret.
“There’s no question a renovation is nerve-racking but for us it was certainly worth it. We love our home,” says D’Antoni. The complete renovation of their 1920s house took over a year, with only the wall and roof framing of the original house remaining.
“When we bought the house, we didn’t realize what terrible shape it was in, even with an inspection. As we got into the awful expenses we did incur, we thought ‘good grief we could have bought a house in Rockcliffe for this’,” she says.
Unexpected damage from a fire that ravaged the home years earlier broke their renovation budget. By that point, too much had been done to back out. After a complete gut and redo, resulting in a new basement and addition, the pricey renovation left them with their dream home — at a cost far exceeding their plans.
But money was never the driving force behind the couple’s decision. It was their emotional connection to the charming and historic Glebe community, their friendship with neighbours and the prime location overlooking Brown’s Inlet.
Any other area just wouldn’t fit the bill, they explain.
D’Antoni and Cameron represent the majority of homeowners, according to a handful of renovators and builders in Ottawa. When it comes down to making a decision between undergoing a renovation or purchasing a new home, emotions trump finances.
“The neighbourhood you live in, the city you live in, the country you live in … this is your own little part of the world. That’s why you put a fence around (your home) and have grass. It’s your kingdom,” says Norm Lecuyer, owner of ARTium Design Build and Just Basements.
“The people that come to us value that over the cost of moving or the cost of renovating.”
Trent Doherty, general manager of design build firm Oakwood, and RND’s Nandram offer similar thoughts. A home is not simply a shelter, but a place where people raise families, make memories and express themselves.
For those with a strong attachment to their home, staying might seem like the only option. But Lecuyer, Nandram and Doherty urge homeowners to remain sensible.
“We can’t build a mansion amongst shacks. It’s a waste of money,” said Lecuyer.
For example, building an addition that exceeds market value of nearby houses makes little to no sense, he explains.
Neither does renovating on a shoddy foundation or undergoing a risky second-storey addition, says Nandram. Homeowners should not let their personal attachments cloud their vision for a reasonable renovation.
“There is always a balance between giving a client sound advice and potentially losing business,” says Doherty.
“But for us, if we can be honest with somebody about what they should do with their home and we lose the sale because of it … I think it’s an investment in what people think of us.”
On the other hand, if the attachment to a home isn’t emotional, then the decision might be as simple as comparing costs.
In that case, Lecuyer recommends homeowners perform their due diligence to compare options.
They should talk to a real estate agent to know the worth of their home and understand the costs associated with purchasing a new house and moving, like real estate fees, costs of improving your home for sale, taxes, fees etc., in comparison to renovating their existing space.
“Without that information, you’re not going to be able to make smart decisions,” he said.
“If it’s going to cost you $100,000 to move to the house you want and it’s going to cost $50,000 for us to give you the house you want, it’s a pretty good deal.”
If the cost of moving over renovating wins, there is another issue to consider — Ottawa’s housing market. Certain areas in Ottawa are starved for listings, which can lead to bidding wars and increased prices.
The city’s core, notably the Glebe, Centretown and Westboro has a tight market, explains Ralph Shaw, president of the Ottawa Real Estate Board.
Shaw says that while property prices continue to be stable and affordable, there are homes selling $20,000 to $40,000 over the asking price.
The average sale price of a residential-class property sold in June in the Ottawa area was $449,200, an increase of 3.4 per cent over June 2017, according to the Ottawa Real Estate Board.
In a competitive market like Ottawa’s, Shaw recommends homeowners plan in advance by having a pre-approved mortgage and hiring a realtor.
“The more prepared you are, the more lucky you are,” he said.
For D’Antoni and Cameron the answer was simple: either you look for the house of your dreams or you create it. For them, a renovation offered that opportunity.
Although cost wasn’t their main concern, Lecuyer, Nandram and Doherty urge homeowners to consider both the emotional and financial impact in making their decision.
But ultimately, Lecuyer says it comes down to connection.
“It’s not all about cost. It’s about family, home and heart.”
If it’s going to cost you $100,000 to move to the house you want and it’s going to cost $50,000 for us to give you the house youwant, it’s a pretty good deal.”