When it comes time to sell their property many homeowners wonder if they should make capital improvements to the home before putting it on the market. It’s a reasonable thing to consider and like any Etobicoke Real Estate agent it’s a question we wind up fielding from prospective clients all the time. Like many things in life however, it’s also a question that does not have a single definitive answer since every property is different and other factors, such as ever changing market conditions, are involved as well. It is possible however to bring some clarity to the issue by enumerating and discussing some of the factors involved. And that’s what we’re going to do below.
Invest or Not Invest: An Etobicoke Real Estate Agent’s View
If you are considering putting money into your home to increase its market value and/or saleability it’s vital to ensure that any money is well spent. Here are several things your favourite Etobicoke real estate agent suggests you consider before you put a penny into your about-to-be-sold home.
When it comes to making renovations to the home in the hope that they’ll increase its saleability or market value it’s important to remember that “renovations” don’t necessarily mean big, expensive changes like remodelling the kitchen. “Renovations” could mean simply cleaning your house from top to bottom, painting the walls, removing furniture with threadbare upholstery and/or adding an attractive (but affordable) piece of art or two. It’s amazing what a few cosmetic changes will do for a home’s saleability. One the other hand if you leave everything else the way it is and put thousands of dollars into remodelling the kitchen you could very well wind up with a beautiful kitchen that’s overshadowed by shortcomings elsewhere.
ROI of Various Renovations
If you decide to go ahead with true capital improvements to the house it behooves you to understand which will produce the most attractive ROI come sale time. Just to test your knowledge a bit; do you know which home improvement actually produces the best ROI? It’s not a kitchen remodel. It’s actually a steel entry door. Upgrading your main entry door to a steel one will typically return 92% on your investment. After that comes:
- Window replacement – Typical ROI 80 to 90%
- Minor kitchen remodel (less than $15,000) – Typical ROI 80%
- Adding a second storey to the house – Typical ROI 72%
- Basement remodel – Typical ROI 70%
So before you make any hasty decisions regarding renovations keep the above in mind. Invest any money wisely based on expected ROI instead of providing things you’d personally like to see but which may not be so important to others.
Local Real Estate Market Conditions
In some cases a homeowner puts money into capital improvements in the hope of amping up the market value of the property only to find that the money they spent was for naught. Why? Because the house next door and the one across the street and the one next to that are a mess. And that’s what prospective buyers see when they arrive to look at the house; not your glistening new hardwood floors and granite counters.
Before you invest any serious money in your home prior to selling it you should understand that it doesn’t exist in a vacuum. Yes, it’s possible that you’ll find a hardy pioneer couple who will ignore the surroundings but it’s probably wiser to scale back your investment plans a bit. The opposite side of that coin of course is if other homes in the neighbourhood that have recently sold for the price you expect for your house had superior features. If that’s the case you’ll likely need to make upgrades. Talk to your Etobicoke real estate agent to find out more about current conditions in the local market.
Consider Doing it yourself
Even something as straightforward as replacing the front door with a new steel entry door can turn into a big investment if you have to hire someone else to do the work for you. If you have any sort of DIY abilities you should consider putting them to good use on your renovation projects. If you need some help getting started many hardware shops and home improvement centres hold renovation classes that can provide invaluable tips and set you on the right path. Take advantage of them and reap the benefits.
The Bottom Line
Any Etobicoke real estate agent can tell you it’s often the little things that make the difference when it comes to selling a home. So instead of automatically deciding to shell out $40,000 on a full floor to ceiling kitchen remodel, consider replacing your front door instead and maybe giving the interior a fresh coat of paint.