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Renovate or move?

Renovate or move? - Don’t make up your mind without reading this

By Barry Lebow (or Frances O’Flynn)

Your house is starting to look a bit tired. Those kitchen cupboards that were state-of-the-art 20 years ago, well, they look 20 years old. The bathroom doesn’t have that relaxing spa feel and it’s tough for two of you to brush your teeth at the same time.

It’s decision time… Move or renovate?

While many people say you can’t go wrong upgrading your current home, the truth is that renovating may not be the way to go. As dedicated fans of the HGTV program, My House is Worth What?, we’ve seen homeowners who have over-renovated for their neighbourhood; picked the wrong things to renovate; infused too much personal style into their changes and done-it-themselves, with disastrous results.  Their renos actually reduced the value of their home and a sadder group of homeowners you’ve never seen.

So, how do you decide?

First, look at your neighbourhood. Is it still a good place to call home? Are you close to the things that matter? As an empty-nester, for example, you may not care about the location of schools, and as a retiree, access to the highway for that long commute may not matter anymore. Are your neighbours still committed to maintaining their properties? Is there a good mix of young and old families? Do you feel comfortable and safe?

Next, look at your house. Is it too big? Too small? Is it getting hard to maintain? Does the laundry room in the basement mean too many trips up and down stairs carrying heavy laundry baskets? Is the garden your pride and joy or a drag on your time and energy?

Then, look at your finances. Can you afford to do everything you want to do at once or will you renovate over a period of time? Will you do it yourself, hire a casual worker or opt for an architect and contractor?  Do you have a lump sum available to spend on home renovations? Is obtaining a reverse mortgage a good way to re-invest in your home?

Finally, ask for another opinion. An Accredited Senior Agent, is now operating in your community. Your ASA is an experienced real estate professional who specializes in the housing needs of older adults and has graduated from a special education program focusing on the needs of seniors. He or she will give you the facts about your home and will help you make the decision about selling or renovating. Because they charge for each service they provide, ASAs won’t try to talk you into selling the house for commission. They are genuinely on your side.

Say after mulling it over and considering all the ramifications, you decide to renovate. How do you avoid some of the costly mistakes made by others?

Well, the ASA can help here too. He or she will know what renovations have the highest payoffs when you do decide to sell your home. And he or she will be able to accurately pinpoint trends – such as a move towards home offices, main floor bedrooms and green renos – so that your hard-earned reno dollar isn’t misplaced. An experienced realtor who specializes in seniors also will know local contractors who have proven themselves and can recommend interior designers, de-cluttering professionals and other support people to make the reno go smoothly.

It used to be that renovating bathrooms and kitchens would automatically guarantee a 75 to 100 percent payout. However, the return on your reno investment may vary considerably according to the neighbourhood and the nature of the real estate market.

Meg Ruffman, TV personality and handyperson extraordinaire, has written extensively on the reno-dilemma for HomeEnvy.com. She points out that renovations in a buyers’ market could provide a smaller rate of return than those made in a sellers’ market. It does make sense. If you consider the power a purchaser has in a buyers’ market to get maximum value for his dollar, it isn’t surprising that he won’t necessarily view your reno as value-added.

She suggests that a kitchen reno in a buyers’ market will return roughly 70 percent of your investment. In a seller’s market, it’s more likely to return 100 percent, even 120 percent for a top-quality kitchen reno in an upscale neighbourhood. Other home improvements such as interior and exterior painting may net you 70 percent in a buyers’ market and as high as 300 percent in a sellers’ market; a bathroom remodel would likely provide you with a return as low as 64 percent on your investment in a buyers’ market and between 75 to 120 percent in a sellers’ market, depending on the neighbourhood and quality of the improvements.

The bottom line is: it’s not quite as simple as it used to be. Renovating to make your home more comfortable for the next few years will always pay benefits in terms of your own happiness. However, people preparing to sell their home in the next few years should be aware of the other side of the coin. Don’t over-improve for the neighbourhood; avoid putting too much personality into your changes and keep market trends in mind.

This information is brought to you by your Accredited Senior Agent, a specialist in the housing needs of older adults. Your ASA is an experienced real estate professional who has graduated from a special education program focusing on the needs of seniors. For information, please visit www.thesenioragent.com or contact, Barry Lebow, President and Founder, Senior Housing Council, The Real Estate Academy Inc., providers of the Accredited Senior Agent designation, 416-784-9806 ext. 107