IS IT TIME TO RENOVATE OR SELL?
Here are three factors to consider in making a decision, Dennis Faulkner writes.
When making a decision on whether to renovate your existing home consider these three factors.
1. Would the cost to renovate exceed my cost of selling and buying a renovated property?
Costs of building materials and labour have significantly increased in the past two years. There are also shortages of some building supplies, which may limit your choices to whatever supplies and finishes are available at this time.
Finding an available and trusted contractor to do the renovations this year may be more difficult, as well.
This will be an expensive year to build a deck, fence or garage. It will also be an expensive year to do a major home renovation.
In calculating these costs, you may find that simply trading your property for a desirable renovated property may be more cost-effective and a simpler way forward than co-ordinating, managing and living through a renovation.
If you love your neighbourhood and are looking at only cosmetic changes like paint, flooring and updated hardware, then there may be a financial advantage to staying and renovating. That is, if you are OK living through the renovations.
Cosmetic upgrades are often the best way to improve the value and desirability of your home. Replacing the roof, windows, fence and deck can have a negative financial return especially when building supplies are at record highs as they are now.
2. Are there suitable and available homes currently on the market that meet your wants and needs, or at least most of them?
Earlier in 2022, the Edmonton region was under a supply shortage of single-family homes relative to demand.
In February and March, it was commonplace to be in multiple offers for the most desirable listings. Some properties on the market would have as many as 20 offers or more, thus reducing any one buyer’s odds of having the winning bid.
Since April we have seen an increase in the supply of homes, which provided buyers with more choices. The increase in the supply of available homes increased the chances of getting an offer accepted as there may only be two or three competing offers or none at all.
3. Would moving to another neighbourhood or location provide benefits that are important to you that remaining in your current home cannot provide?
Perhaps your job has changed and your commute now is longer than you like. Buying a home closer to your work could save you travelling time and expenses. Maybe your children are now attending different schools.
It might be important to you to be closer to family to take care of elderly parents or to have more help raising children.
Have your needs changed in terms of actual space? Do you find that the size of your home is now too big or too small? Adding an addition can be way more expensive than simply trading for a bigger home.
If you live in an older home that is not energy efficient, there may be a financial benefit to buying a newer, more energy-efficient home. Further to energy savings, the newer home is likely to cost much less in maintenance and repairs over the next 20 years compared to an older home. Buying a home two to five years old can make life easier, more comfortable and reduce the overall cost of home ownership.
Perhaps generating revenue from your home is important to you. There could be a cost advantage to buying a newer property with a purpose-built income suite compared to adding an income suite to your existing home.
Today there are more regulations and rules for legal income suites, which can result in significant costs to convert an existing basement development to an income suite. Often the biggest costs are installing egress windows and a separate heating system. Having adequate sound separation between the suites can be expensive, too, as you may have to rip out an otherwise perfectly fine ceiling.
Compared to almost any other year, this year could very well be better to just pick up and move compared to embarking on a renovation project.
If you would like a little help when deciding to renovate or sell, please reach out and I can provide you with a renovation guide that itemizes the typical cost and payback (if there is one) of a variety of home improvements and renovations.