What you need to know before you decide to commit to keeping an existing house, sell or purchase one when it comes to new renovations.
Home Renovations How To
When it comes to renovations, there are a few things you need to consider which I shall address by a listing questions than answering. We can look at three key factors here that make a world of difference when renovating a house. They keep it, sell it and purchase an existing home.
Let’s look at them through each question I have created to see the difference as choices 1 to 3:
What is it you want to do?
1/ With a home you plan to keep, one thing you should always bear in mind is resale value for where you live and how long you feel your planning on staying in the home after your renovations are complete.
The reason for wanting to know this or at least you should want to know as follows. Let’s say the street value of the homes in your neighbourhood range from $200,000.00 to $400,000.00 on average. For simplicity, we are going to say that the houses are cookie cutter meaning the builders constructed the same basic house so the values at the time of sale where the same.
Now here we are ten years later some houses totally upgraded and others not touched or taken care of properly hens the price $200,000.00 to $400,000.00. When your planning on staying and your house says worth $350,000.00 you can consider how much you’re willing to invest into your home before you max out over the street value.
For instance if your planning on doing a total makeover says $80,000.00 and two months after completion you need to sell for sudden job relocation, that’s going to hurt. Your $30,000.00 over the top of the market and people may not want to pay your higher price.
If you can stay living in the home after 2-3years, then perhaps the market will catch up, and your investment will once again be stable. By knowing the value of your home plus keeping the total cost of your renovations at or below market value for your neighbourhood you’ll keep your investment and yourself in a safer position.
2/ Looking at selling your home we already know about the market value, so it’s a matter of what will give you the best bang for your buck. If you sell the house with no renovations how much would you get. If you do some renovations so you can sell the home at a higher price, do you end up with more money after you calculate the extra money spent on improvements. Believe it or not sometimes it is just not worth doing any excessive renovations before selling.
When selling before doing any renovations, know your market then compare the cost of renovations to potential profit to see if it’s truly worth the time and money. Rule of thumb takes care of all minor repairs, clean everything up, and a coat of paint goes a long way. Run the numbers before you get into deep!
3/ Purchasing a home is a little different than selling and puts you closer to someone who has a home and wants to renovate while planning on staying in the home for years to come. When you’re buying a home you’ve taken the guess work out of the value because you’re the one setting the price you’re willing to pay. With that in mind, you can then figure out what you would what to renovate and get an estimate of your total cost.
The downside to this is you have no history to the home and could get some surprises once you own the house and start the renovations and open up, as they say, a can of worms. A good home inspection and some research can save you a lot of trouble in that department.
Are you planning on doing any of the renovations?
Whether you keep, sell or purchase a home, one of the biggest factors to renovations comes down to how much are you planning on doing. The more work that you are capable of doing yourself, the more you can do to the home from a budget point of view in savings or more renovations completed for less overall.
One of the other things when you have the time to do your renovations you also save on all the extra taxes and hourly job rates. Most contractors bill you full trade and helper rates with their company charges on top of that. Example: a certified electrician where I live will cost you $25.00 and $15.00 for his helper, but $40.00 is not the bill. You well pay at least $55.00 per hour plus add taxes on top of that again for the two electricians from the electrical company. Unless you get sub-trades, you will pay extra.
How many different tradespeople do you need to do the job?
The amount of tradespeople you require depends totally on which renovations are you doing and are you handling any of the work. If you are gutting your kitchen and doing a total makeover with some changes, it could result as follows.
- You hire a general contractor, and he brings in his crew. Electricians, plumbers, drywall guys, tapers, carpenters, tile setters, painters and perhaps counter top, cabinet installers to get her done.
- You decide to be a general contractor and save some money and hire the appropriate sub-trades for the job.
- You save even more money by being the general contractor and doing some of the work yourself and just hire the extra trades you need.
One thing I also need to mention here at this time is whatever portion you do will have no warranty for workmanship if you have been using quality tradesmen. Without quality tradesmen, you are just dealing with what we in the trade refer to as curbside. Once there paid they are gone, never to be seen again unless you’re going to give them more money. ( Unqualified people can cost you serious money in the long run!)
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