I'm in the process of contemplating a major renovation that would include a second level addition to a single story bungalow that would include extending the basement and also an overhaul of the kitchen. I'm sure the costs would exceed over 100k and I would like to keep living in the house as our family has been here for a few years and settled. However, would it be more beneficial in the long run both financially and structurally to buy a new home?
A number of factors need to be weighed when making a decision like the one you propose. I wonder about the value of similar type homes in your neighbourhood, and if after completing your renovation if your home would then be priced higher than the market for your area. Location is very important as well, so it may be wise to build given the location of the home (premium lot, lake front, accessibility, etc). If you can sell the home you have and buy the one you want it may be better in the long run. Hard to tell without know a lot more about the area, the changes you want to make, and what your ultimate end game plan is for the house. A home is an important part of all our lives, but all homes eventually are sold. My primary concern is that you don't overbuild so you are in a situation where you wouldn't make any money on the investment, or worse yet, not get your money out. Any renovation should provide a return on investment, or the earning power of the money you used is lost.
Just some thoughts, good luck!
Fantastic info! Moving will be something we do now or later and I never thought about overpricing our house in comparison to the neighbourhood. I will do some more research and definitely give this some more thought. Thanks!
I think paul is right, the ordeal you would go through (and unforseen costs) to that sort of reno would be surprising. 90% of those kind of changes unfortunatly end up sinking considerable more then you would get back out when you went to sell.
With out knowing too much about the area you live in or the size of your property I can tell you that Bungalow's are becoming quite rare and sought after. Many empty nesters want to downsize and at the same time do not want the condo life are opting for Bungalows. I would definately do my research and take the value of my property and the $100K you're planning to spend find out what is available to me in that same price range.
So why do home renovations?
Why not just sell and buy new?
The cost of selling your home including, realtor fees, moving expenses, legal fees, and taxes adds up to about 30,000 dollars on average.
People are opting to stay put and renovate instead. $30,000.00 can do a lot to change your home while avoiding the expense and work of packing and moving.
If you like your yard, your view, your neighbourhood, or your kid's school, you have an option. You have a viable option Renovate. People choose to renovate for a variety of reasons but usually it comes down to one major thing, their needs for housing have changed.
Have your kids moved out and the house is too big? What about a secondary suite for a university student or repurposing the extra rooms to pursue that hobby you love, or a home based business.
Have your kids become teenagers and can't share rooms any more? You might be able to create that space and keep your neighbourhood. What about an addition?
Is your gas bill breaking the bank?
Let's get an energy audit done and find out how we can improve your home with some help from government grants.
Perhaps your husband has been transferred and you have to move?
And your realtor says the market is tough, she suggests an upgrading or cosmetic facelift?
These are all good reasons to renovate never mind you might have pink shag carpet, or cabinets from the 60s!
You have to decide whether you want to live in this house for the rest of your life.
If you do in fact decide to sell, get a GOOD certified home inspector in to pre inspect and fix all necessary.
Same for the next house, find a home inspector that is certified.
Personally I would renovate to your liking. You may buy new and find that it also doesn't suit your needs.
Just my opinion.
My experience has been that most people, particularly in the toronto area, decide to stay within their communities because of the location, familiarity with their community and the friends they and their children have developed over the years. In addition to the value that their homes will continue to have being close to the centre of the city.
Yes, there are plenty of new homes being built out there in the outer parts of the gta, but if you work in toronto the commute has a significant impact on the time you spend with family and with your car.
Staying within the value of the homes in the area that have been upgraded is important ie. bought for 350,000 and spend 100,000 means can your new value sustain itself with other renos of your type. However, having said that when we design our projects we have found that its also all about the design of the product (curbside appeal) that will have a significant impact on values within a neighbourhood. For example in both leaside and east york, our designs and builds have set a precedent for others to follow and it also resulted in an increase value to that home and established a new benchmark price! (See the before and afters and their increased value price points on our web site)
Structurally, in my designs and experience (design and build company; and we do all our own drawings) 2nd storey additions to existing houses have existing footings that can bear the additional capacity of another floor. Architecturally, i find that people in neighbourhoods are timid in planning and designing their renovations to exceed existing zoning and to create a beautiful facade as part of the overall renovation. Builders who flip houses, often times hire the right design professionals to give them the wow factor that turn heads on a street, yet looks like the new house renovation has always been there, and even well thats what you should do on this street and in this neighbourhood. This is how builders make money, like you should on your investment property. Its not unusual for someone to spend 25% more through good design to get the best home in the neighbourhood and have their dream home.
In the end most people i have worked with have agonized about this process, and in almost all the cases, they choose to stay in the city, increase the value of their home and maintain their relationships with their community.
As a flooring installer, I have found that when people get into re structuring a house, that the transitions from old to new are always going to have issues and when installing flooring, you see alot of bad construction. I reccomend you find a really good general contractor and check out previous work tha he has done, before getting into things too deep. The other option which you had mentioned is start looking for a new home.
All the best
Renovating is the way to go . Expenses ad up when moving , such as realestate fees, trucking , damages, taxes and refinancing if needed. Many now stay right where they are, if space is available. In the long run, renovating is the way to go. Remember, you home is your castle.
It's very difficult to choose the options you gives without knowing the area, but in my opinion it's good to remodel the house because it's also increase your house price and you can save cost and time both.
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