To Renovate or Move

It is a question that potential home sellers often wrestle with

A number of questions come to mind when considering this important decision:

  • What is the home worth now and what will it be worth once I renovate?

  • Will the renovations truly reflect my changing needs?

  • If I do spend the money, will I still be happy living in this neighbourhood?

  • Will the home be over-improved for the neighbourhood?

  • How long will I need to live here to recoup the cost of renovations?

See Below:

The Appraisal Institute's Home Renovation Survey List of Renovations with Average Potential Payback

 

What is the home worth now and what will it be worth once I renovate?

This is an exercise that requires a two part analysis. The home is evaluated as it sits, then you determine the home's projected value as if renovated. The latter exercise is the trickier part of the analysis. A projected estimate of market value without the renovation actually completed can be skewed. What if the renovation is not up to standards, especially buyer standards? What if the renovation is well done but, because of poor planning, does not conform with or complement the home's overall design? 

As an example, a costly addition may give the extra needed space. If, however, the roof and exterior walls do not conform with the general design of the home, it could adversely affect the value of the addition. The overall value of the home would increase, but at a less than desirable percentage of any average return on costs. 

Will the renovations truly reflect my changing needs?