Homeowners start renovating for various reasons – function, style, design and sometimes to increase the future value of the home. But what happens when proposed renovations conflict with the future resale value of the home?
Let’s say, for example, that you, the homeowner, have your heart set on giant marble showers, with two rainfall showerheads, a bench and a steam option. You almost never take baths so you don’t see a problem with converting all the current shower/bath combos.
But when you try to sell the house a few years later, you find out that many homeowners love taking baths, especially families with children who consider them a necessity. Depending on your housing market, there may be slightly less interest in your property because of your renovation decision.
Now, is this a bad thing? Maybe, maybe not. Primarily, a home you purchase to live in (not as an investment) has to work for you.
You can’t be constantly weighing the future resale value when renovating because you don’t know what the housing market will be like at that time.
Market Demand Makes a Difference
Look at Vancouver real estate or MLS listings in Toronto to see an example of how this works. Many older bungalows in these red-hot markets are being bought primarily for land value, the homes either torn down or extensively gutted. It’s doubtful that any interior or exterior renovation would have made a big difference to the resale value.
So first and foremost, renovate primarily with you and your family’s needs in mind. At the same time, it’s good to be aware of which renovations have the potential to decrease your resale value because then you can make informed decisions.
To figure out which renovations are unlikely to add value to your home we turned to HGTV.
What we found was that buyers don’t appreciate renovations that they can’t see, require a lot of maintenance, or is something they would prefer to redo to their own taste.
These include backyard features like jungle gyms, a tennis court and a swimming pool. Although those features can add much to your lifestyle, future buyers may see them as a safety hazard, or prefer a wide open space where they can garden and let the dog run around. New windows and an HVAC system are also unnecessary to fix just to increase your home’s value, but they are useful to cut down on your utility bills. Other renovations, like new wall-to-wall carpeting and floors have surprising little effect on resale value. It turns out that future homeowners would rather redo floors to their own taste. For now, steam cleaning existing carpet or sanding hardwood floors should do.
These are renovations that you may want to go for your own personal enjoyment, but are unlikely to bump up your home’s value.
Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Home buyers can browse homes across Canada on the website or the free iOS app.