One of the first questions we ask buyers (especially in the Beach and Toronto) is if they want to buy the renovated home or a fixer-upper. Not sure? Read on to see what you need to consider before you decide.
Everyone has a different level of tolerance, appetite and resources for renovations.
As serial renovators ourselves, we understand it’s not everyone’s cup of tea (perhaps indicated by some people’s reaction of “Are you crazy?” when we talk about our own projects).
Let’s consider the variables to make sure you make a choice that leaves you still in a relationship with your partner and not completely penniless.
Even though a home needing major renovations or even a good dose of aesthetic help will be priced a lot less than a finished home, you still have to have the cash on hand to do the work. There are options such as construction loans but they tend to be complicated. Keep in mind that renos ALWAYS lead to surprises – having just enough for the work is a recipe for disaster so you need to budget for 10-30% for unexpected work and changes.
Speaking of budgets, make sure you know what the cost is for the work – if you need to be clear on a range, we often bring in a contractor even before our clients make an offer so they can plan and know their costs relative to the purchase price.
Is the home and the work you want to do worth it relative to the value of the home? That depends. Are you thinking of selling in 5-10 years? Flipping in a couple? Or is this home truly for you and your family for as long as you can see ahead?
Your agent should be able to tell you if the asking price of the home warrants the additional investment once the work is done. The best place to start is a comparative market analysis of homes that have been renovated to the degree that you are planning for.
Consider what you are planning on renovating. Your first goal should be the kitchen and bathrooms if you’re concerned about value.
Have you been dreaming on Instagram and Pinterest forever? But the reality of going through a renovation isn’t something you’ve fully considered?
The amount of time required to research, select and source finishes can be incredibly consuming, especially if this is your first reno. Not to mention the amount of onsite supervision that needs to happen even with the best of contractors.
If clients are still determined to follow through with a reno, we recommend they work with a designer. A lot of people tend to be intimidated by designers (and their fees) but the experience and the results are almost always worth it. You can limit the scope to things you are having hard time selecting or get a project-based quote. The amount of time you’ll and money you’ll save by not changing things mid-reno and avoiding mistakes will more than make up for it.
Consider your personal life. Did you just have a baby or have young kids at home? Are you both working full time in highly demanding jobs or travel a lot for work? Can you live through the renovation or will you have to find short term housing? Going through a reno is at best a part time job, and all consuming.
Instead of going to Monkey Magoos play center, our daughter (two years old at the time) had playtime at Home Depot. Her reward for being good at the tile and lighting stores was a pit stop to the Rainforest Cafe for lunch. Date night was spent going over floor plans. Vacations fell off the radar in favour of heated floors and Ceasarstone counters.
Consider how you want to spend your time because there won’t be any left if you’re renovating 🙂
How quickly can you make decisions? If you’re in a relationship, how well do you make decisions together? Are you completely rigid or can you compromise? With renos you can’t always get what you want and you most often have to sacrifice to get what you need.
If you agonize over what to order for dinner, then perhaps making hundreds of decisions with contractors looming isn’t going to be your happy place.
Pride of Authorship
If you have a design bone in your body or have done a reno before, you will find it very hard to live with someone else’s renovation.
Take the scenario of a decorator (true story) who bought a newly built home. Her husband thought with some relief that they wouldn’t have to go through any renos because they bought new. But she didn’t design it. Flash forward a year and the kitchen has been remodelled, the basement was completely refinished, the fireplace and mantle have changed, the whole place was repainted and that’s just the start.
If you can’t fundamentally live with the expensive stuff (kitchen cabinets, layout, counters, tile etc.) then don’t pay for someone else’s renovation.
How far is too far?
If you’ve decided that a reno is for you, think about the degree to which you are willing to go both in terms of the work and the money. Are you only up for aesthetic changes like new cabinets, hardware and flooring? Or are you willing to gut the house and deal with structural changes or repairs?
What to look for…
When you’re in the market, there can be fantastic homes that are overlooked because someone can’t see past the 80’s kitchen and the vinyl floors or odd layouts. Our current home sat on the market for 7 months because the previous owners had done some strange additions and no one could see its potential. We even had trouble ourselves but brought our contractor through a showing and he made some suggestions that made it all clear.
The basics to look for include structural integrity and ideally previous owners who did ongoing maintenance and modernizations (i.e. converting knob and tube, repairing or replacing the roof as needed). We’ve seen some incredible homes – one that comes to mind is a bungalow with same owner for 50 years. It was like going back in time…everything was actually perfect in the home. It was just stuck in the 60’s…the same kitchen, bathrooms, flooring etc.
Compare this tale of two homes…
We had been looking for a renovation project for some time and heard of a home that had been lovingly occupied by the same couple for over 40 years. Over time they had under pinned the basement, they put on an addition off the back, they upgraded the electrical and put on a new roof about 5 years prior. But the kitchen and bathrooms were dated, the trim and flooring in the addition did not match the original home and the rooms were small on the second floor. But the home was solid.
We weren’t able to buy that one but a few months later we heard the home next door would be coming up for sale. By comparison, this home had a termite issue that was never dealt with, overgrown poorly maintained trees that had started to wreck the roof, knob and tube throughout, cracks in the ceilings indicating water damage or structural issues. Needless to say this home wasn’t even a possibility for renovation but instead held greater value as a lot to build new.
What have we done?
When we bought our previous home, it had been unoccupied for six years and required a complete gut reno. The only thing that remained by the time we were done was the framing and the roof.
This was our first major reno. We’ll never forget looking up at the home after the inside had been completely gutted down to the studs and the windows had been removed thinking, “What have we gotten ourselves in to?!”
Sometimes you just have to jump in and go for it. For us renovating has turned into a passion and there is nothing more satisfying than looking back at the ‘before’ pictures.
The resources available today have gone a long way to making renovations easier. Educate yourself, get those idea boards going on Pinterest and Houzz.
And if you need any help, you can always call 🙂
The Mark Richards Team