Purchasing a home is often just the beginning
Buying a fixer-upper may be the best option for many hopeful Toronto homebuyers
With an inflated real estate market showing no signs of cooling down, the only choice for many hopeful homeowners is a fixer-upper.
As dreams of snapping up the perfect house replete with modern updates become seemingly out of reach, those hungry for a slice of the housing pie are quickly discovering that the pickings are slim amid cutthroat bidding wars, limited stock and complete teardowns going for a million dollars or more.
Whether purchasing a near-fallingdown house with plans to gut straight away or a more livable space in need of updates over time, when taking on a project house, be prepared, say the pros.
“What I am observing more and more is despair,” says Monika Merinat, a broker with Royal LePage Terrequity Realty.
“There is this ‘I’ll never own a home’ feeling. Buyers are looking for fixer-uppers, and not always to fix them up. More and more they are ready to live in a house as-is just to secure a piece of real estate. Now buyers feel lucky to just be able to acquire a property. They are bruised by all of the previous bidding wars they had to go through.”
Three years ago, when Emily Anastassiadis, 36, and her partner, Jesse Visser, 40, were ready to buy their first home, they were disheartened by the options available to them.
They had their hearts set on a Leslieville fixer-upper, then discovered it had major costly structural issues. They viewed another property in the Woodbine Ave. and Danforth Ave. area but “walked in and walked right back out,” recalls Anastassiadis.
Still, at $450,000, the price was right and their agent convinced them to take another look. On the second visit, they still were unimpressed. With two small children, then ages 1 and 3, they needed to think of safety, something the two-bedroom, onebathroom home seriously lacked.
“The second bedroom was in the attic and had a crazy steep staircase in the middle of the room. The room had a half wall so the kids could pull themselves up, lean over and fall head first down.”
Still, feeling desperate, they put in an offer of $447,000, which the owners accepted. They decided to save money by completing the renovations themselves.
The couple was in for some major surprises. On the to-do list was removing the white stucco on the upstairs walls, ceilings and closet doors, which soon revealed asbestos in the walls, floor tiles and around and over the air ducts.
Visser researched do-it-yourself options for asbestos removal, enlisted the help of his best friend and, outfitted in hazmat suits, the duo went to work expelling the hazardous material.
“It saved us $5,000,” Anastassiadis says.
“We’re both teachers, so time wasn’t the issue, money was.”
Meanwhile, the second-floor ceiling was sloping in toward the main floor. Turns out a previous owner had removed a wall and beams, leaving it completely unsupported, something the inspector had failed to notice.
In the end, they removed the roof, extended the slanted attic walls to two metres, relocated the staircase to the side and re-enforced the second level so it wouldn’t come crashing down. They recruited friends to help, hired a structural engineer and paid a total of about $35,000. They slept in the basement until the work was done. “If we had known when we were buying a house how much would go into it, I don’t think we would’ve had the energy to go through with it. But I still feel really lucky that we own a house,” says Anastassiadis.
While there are benefits of buying a fixer-upper, it can be a stressful experience, warns Jay McDonald, owner of Elite Construction and Renovations.
“It’s hard to explain to people the massive amount of work that needs to be done for a $750,000 reno. It’s a common process, but it’s not an easy one.”
If taking on a project home, carefully consider the purchase price and the hundreds of thousands of dollars it may cost to update.
“The pros are that you get to design a house that suits your own personal family’s needs and desires and there is no other house you can purchase that will do that,” McDonald says.
“Every family that I build houses for or do renovations for is completely different. The cons are always the stuff you see on HGTV, ‘oh I opened up the wall and there was mould inside,’ and those are very realistic problems. But when you get to a certain scale of renovations it doesn’t matter if you have bad electrical or bad HVAC because, at that scale of renovation, I am ripping it all out anyway.”
Fifteen years ago, when Toby and Rebecca Haensel, both 43, bought their first home in the Broadview Ave. and Dundas St. E. neighbourhood, they weren’t thinking longterm.
The pair loved the style of their find, but with no parking and limited closet space, it certainly wasn’t designed with a family in mind. Now, with two kids, ages 12 and 9, the two-bedroom, one-bathroom house is a tight squeeze at just 14 feet wide and 1,200 square feet.
The family is in the midst of a debate that will be familiar to many — should they stay or should they go?
With a desire to move, Haensel, who works in the financial industry, is in his own camp. He peruses real estate sites daily, but says the odds of selling are not in his favour. After all, a home is not simply an investment; there are also emotions and memories to contend with, as well as strong attachments to one’s neighbourhood.
In other words, his family wants to stay put.
While they have received pricey quotes from contractors, even with renos, the space will max out at 1,500 square feet. They are also keenly aware of the financial risks of buying during a housing bubble.
Haensel says he’s learned a powerful lesson.
“You don’t buy a house for now, you buy a house for 20 years from now, especially if the plan is to have kids,” he says.
“If I had the option of purchasing a new home now, and we’ve already established the unlikelihood of that, I would buy a fixer-upper if it only needed new bathrooms or a kitchen, and I would hire people to do it. I wouldn’t buy a home and then sideline my family moving in until a massive renovation has been completed. That would reduce my popularity at that moment even more.”