Maximizing the Utility and Value of Your Home Renovation
by Ralph Fox and Kori Marin
Home renovations are an inevitable step for almost all homeowners at one or several points in life. Although many might solicit the help of an Architect or Interior Designer, too few consider the benefits of supplementing that advice with that of a Real estate professional. While the design professional can help maximize value, the Real estate professional will define how the market measures that value. Together, they can intelligently achieve a perfect balance between the qualitative and quantitative tools they each offer, respectively. Although there is no limit to how much you can spend on a home renovation, you should consider your investment along with your lifestyle. This is also true if you are on a budget, as most are. If not planned out effectively, the value of the renovation costs may not be able to be recouped when the sale of your home occurs. But how can you maximize both the utility and value of your home renovation?
The first thing to consider is the Market data in your neighborhood. Regardless of how long one has lived in their community, individuals or their designers will likely not be familiar with the entire makeup of their neighbor’s homes as well as the Real Estate Agents specializing in those areas. Local Agents will have been exposed to a considerable amount of home renovations and will have witnessed first-hand, the impact they have had on the value of not only the home itself but the neighborhood as well. Those Agents will then able to discuss the renovations that have returned the best value in each neighborhood. With this context, a baseline budget can be established which may end up being less or much more than anticipated.
An agent who knows your neighborhood will be the best person provide advice on the nuances of the Market. Using the available local Market Data, Agents can also help identify the reasonable standards in the neighborhood to help you understand what is expected to meet the standards of the homes in the area.
Depending on the conditions of the local market, the value of your home may already be at its maximum potential and any renovations may become superfluous, adding little to no value in relation to your home as an investment. Even in a hot market, homeowners must be cognizant of over-renovating. Typically, this occurs when the value of a home is already significantly higher than the comparables in that neighborhood. A real estate professional can provide these statistics and walk you through the variables.
An additional item to consider is that buyer perceptions vary, and potential buyers may not have the same tastes as you. Though there are classic and neutral designs that may seem “universally pleasing” it is challenging to predict how a potential buyer may react. A seasoned real estate professional can get to the heart of what drives certain perceptions and can single out or establish those worth pursuing in your home. It is important to remember that most buyers will not be able to identify the difference between a $800 and $2,000 bathroom sink.
A prudent homeowner will also consider the potential hidden costs of renovating. No matter what the budget, most homeowners run into setbacks that end up costing far more than anticipated. Working with a Realtor who is in tune with construction costs can provide you with the additional benefit of flushing out unexpected costs. Although Designers can ensure your project stays on budget, the real estate professional brings to the table an understanding of costs in relation to the reasonable standards of the local Market, early in the process. Working together, the Designer and Agent can identify the costs and hidden costs associated with your project.
Whether you are considering selling in the long or short term, renovations should always be carefully considered prior to beginning any work. Real estate professionals can provide a clearer sense of the big picture so you can work with your designers on a budget that is feasible and marries your taste with the market. Seeking the advice of a trusted agent who understands what creates demand in your neighborhood can help maximize your investment and keep you updated over the long term for future improvements.
FOX MARIN is a dynamic duo with decades of success in real estate investments and brokerage services in the GTA. Fox Marin creates smart solutions that meet each client’s unique personal and financial objectives. They have been featured in BuzzBuzzHome, Canadian Real Estate Wealth magazine, Global TV News, The Huffington Post, New Condo Guide magazine, and the Toronto Sun.