A fundamental question that many homeowners deciding to upgrade or renovate their property is: will I see the return on my investment when I am ready to sell this home?
There is no easy, one size fits all answer to this question.
What a prospective purchaser may be looking for varies greatly from one buyer to another. Some may prioritize more space while others may prefer newer materials over square footage. The cost of other homes in the area also plays a big role in determining the ROI (return on investment) of your renovation.
If you are contemplating a home project, the statics reveal that you could expect to see on average about a 70% return on your investment with the right upgrades. The keywords are THE RIGHT UPGRADES, which merits the question, how do we know what to upgrade? How do we know we are doing it right?
I recommend that before any decision is made, you do your research and enlist the help of professionals.
During my most recent conference, My First Home in Canada, I hosted a panel of experienced realtors from across the country. All 4 of them, Felipe Lomana from British Columbia (Two Brothers Real Estate Team), Folami Olupitan from Alberta (Urban Real Estate Services), and the dynamic duo, Ana González and Natasha Lal from Ontario, answered questions like:
· How can homeowners determine what will bring the most amount when they sell?
· In a buyers’ market, should they even bother renovating?
· What are some popular features homebuyers are looking for?
I also asked them how, or if, the pandemic changed what people are looking for in a home, and if they thought open-concept layouts would be a thing of the past.
Although I encourage you to click here to watch the full conversation, I decided to focus this blog, along with the next, on 2 key questions that spoke to me:
What is the single most important upgrade every homeowner should consider? How soon after possession should they start improving their home?
The first question stems from an article I read on Homelight.com written by Valerie Kalfin, What upgrades increase your home’s value: 25 High ROI Improvements Buyers Love, where she shares 5 main categories of upgrades that perform well and are likely to help you see an increase in the equity of your home.
o Improvements or upgrades that increase the efficiency of your home
o Upgrades that add style
o Renovations that increase the square footage of the home
o Investing to enhance your home outdoor living spaces.
o Improving you homes curb appeal
So I asked the panel of realtors to choose what they felt was the most important one among those 5 from a realtor’s POV.
Ana, who grew up in a real estate family, prefers a balance between all 5, but when asked to choose only one, she went for more square footage. She explained it this way. “It doesn’t matter what your idea is for the home, if you have the square footage, you have the added value… Whether you choose to be in this home for 10 or 5 years, you want to be able to have it appreciate and to get as much for it as you possible can”.
While Felipe Lombana admits that upgrading all of those 5 categories would be great, he also said that “it just make sense to increase the square footage if you want to increase the value of the property… People want bigger”.
I agree. When we bought my first home in Canada, there were many things I wanted to do, like upgrading my bathrooms and changing the carpets. However, I chose to start in the basement. We finished it and added one more bedroom, a den and a full bathroom. We also knocked down a wall and reduced the size of the kitchen island to open up the living/dining room and in turn added more square footage.
In honor of my distinguished panel of realtors, here are suggestions to increase the square footage of your home:
1-Finish the basement. If your furnace is in the middle of the basement, consider investing more money to relocate it in a better spot. That is exactly what I should have done when we did ours. Trust me, and thank me later.
2- Knock down partitions that may visually cut down on your usable space.
3- Use the same type of flooring all throughout. The photo below shows 2 floorings in one area. Installing one continuous finish gives the illusion of a larger spacer.
4- Don’t chop the look of your walls by dividing them with chair rails in different colors. Take a look at the difference it makes when we eliminate the differences colors on the walls.
5-Add a sunroom, a deck or a terrace.
Soure: Lifestyle Home Products
6- Rethink the layout of your kitchen, like I did in mine. These photos show you how by simply reducing the size of the island and removing a pony wall largely impacted the square footage of this space.
Finally, adding square footage to your property will come down to the layout of your walls, entryways and the location of the HVAC systems and of other more permanent features in your home. If this is part of your plan, consider all your options before making a final decision, and include aspects like the traffic flow, where natural light comes from and the future plans for this space.
When Debbie and Goe (2 of my amazing clients) came to me, they had just moved a cabin to their lake property and were making important decisions about their basement development. They debated between more bedrooms or a larger recreational area, and more importantly how to work around permanent columns obstructing the area. After providing them with options (see photos below), they were in a better position to decide based on their family lifestyle and vision for this family destination. With the right planning, they optimized their budget and maximized their space, avoiding future regrets.
With the right planning, they optimized their budget and maximized their space, avoiding future regrets. If you find yourself in a similar situation, in the brink of a basement renovation or simply wondering if knocking down walls will be the best decision to open up your space, book a complimentary design consultation and let’s discuss your options.