I would say that Canadians have quite a bit of pride as a group. Travelling abroad, welcoming new folks into our country, bragging about our healthcare, there are a lot of opportunities to proudly exclaim “I’m from Canada!”
Unsurprisingly, we, as a group, are generally proud of our homes as well. You might read something like “pride of ownership shows” while reading through a real estate listing description or “well taken care of” or “immaculate”. While these phrases could mean a million different things, the point is, our homes are (generally) a point of pride for us folks north of the border.
There are many reasons to spend money on your home, pride being one, and “I want to maximize the value of my home in advance of listing it this fall” being another. That is obviously not an expansive list but for the sake of our discussion today, it will suffice. As the value of homes in Canada have grown in the past few years, that is to say aggressively, homeowners have found that they have access to quite a bit of equity in their home or that it has become more of a focus in their life. Refinancing to pull out equity in order to fund renovations, additions, pools, etc during 2020-2021 was all the rage as homeowners took advantage of lower interest rates and sought to increase the value of their home.
And that is what this list is about today. Because if you live in your forever home and have no intention of ever moving, then what I or anyone else thinks about how you spend your money on your own home should have no bearing. You are doing that for one reason only, and satisfying yourself is all that matters.
For anyone that is thinking they want to increase the value of their home for a future sale, here is a starting point! Let’s dive in with the worst (in my opinion) ways to spend your money on your home:
#3-Pools and Hot Tubs
These are pricey and polarizing items to spend your hard earned money on. When I say polarizing, I mean there will be some buyers that really want a pool, or they really don’t. And I would say that there are more people that don’t, depending on the area, price point, and style of home you live in. And then, for those that do want a pool, do they like the choices you made? The “vibe” in the backyard? There are a lot of ways to get it wrong.
And hot tubs, swim spas and above ground pools are largely looked at in a negative way and more of a burden than a positive for a potential buyer. Most buyers will just want it gone before they move in or they will offer you less money for your house if they are going to have to deal with it themselves. I find most buyers that want a hot tub either already own one and want to bring it with them or will want to buy a new one when they move in.
Don’t think that you are going to increase the value of your house by adding one of these features to your backyard. You would be lucky to get one dollar for everyone dollar you’ve spent yourself.
#2-Electronics
How quickly does technology evolve these days? Fast. I’m pretty sure that they have released a new iPhone since I started writing this blog, or built a new VR headset or somehow connected all of us to the Metaverse without our knowledge or consent.
The fact is, technology changes very quickly and what is cutting edge today will be defunct, out of date or irrelevant tomorrow. So why are homeowners obsessed with built in technology for their homes? I will never understand this. Speakers in your walls and ceiling? Forget it. Intercom system? Welcome to the 80’s. And what is all the rage in 2023? Smart home automation. Personally, I haven’t looked into smart home automation or technology for my home at all because it’s confusing, there are too many brands that don’t work with each other and guess what. It will all be outdated in 3 months. So, thinking that a buyer will gush over your home technology and fork over the big bucks is misguided in my opinion.
#1-Specific, high end materials
Do you ever watch a show on HGTV like Million Dollar Listing and hear things like “Italian marble” or “Venetian blings” or something else that sounds made up and everyone on screen is clearly amazed and impressed by the opulence and luxuriousness of the home? It happens on TV all the time.
How often does that happen in Ontario? Rarely and almost never in London, Ontario. In our neck of the woods, hardwood is hardwood, quartz is quartz and buyers don’t care where the materials came from, how much they cost or how difficult it was to get your hands on them. You’re wasting your money.
Where buyers do care about materials is in the quality of construction and installation. Hardwood is not hardwood if it was installed poorly and there are gaps between the boards. That is a renovation project that somebody is going to have to take on. Likely the new owners who are going to take that into account when they decide how much to offer you.
***Remember, we are looking at this through the lens of a homeowner that wants to sell their house. If you are never going to sell your house and you want to spend 100’s of thousands of dollars on a pool, high end appliances and finishes, be my guest! I want you to have the house of your dreams.
Now, onto the best things to spend your money on:
#3-Necessary repairs and updates
I really thought about putting this as the #1 thing to spend your money on but I find that people often have a hard time spending their money on the un sexy, but necessary, updates that their home needs. We’re talking about things such as a new roof, new furnace or A/C, windows, insulation, and other items that are in disrepair.
You might not care that your house is inefficient, leaks hot and cold air, floods in the spring or that the deck wobbles when you step out on to it. But a large majority of buyers will care and they will discredit the value of your home accordingly.
So these expenses don’t necessarily increase the value of your home, but they do make it worth “market value” to most buyers who will appreciate a well functioning home.
#2-Kitchens and Bathrooms
The two big ticket items, the blue chip prospects, the all stars of the home renovation landscape. They are the most expensive and the hardest rooms to update but they are by far the most rewarding. Spending $10,000 on a new bathroom or $30,000 on a new kitchen will always pay dividends in the home valuation world, with one caveat: that you do it right and don’t make bad selections.
The best way to make sure you don’t make either of those mistakes is to hire a professional and reputable company to take that off your plate.
If done correctly, you can see 2 to 1 or even 3 to 1 returns on your money depending on the previous state of your kitchen and bathrooms. No other room in your house can touch this type of return, nor does it need as much attention.
One note: adding a second kitchen to your home does not fall under this category and might even belong in the previous category of worst ways to spend money on your house.
#1-Functionality
This is a vague category that could mean a million different things in the context of your home. But improving the functionality of your home is the best way to add value to your home by far. What does this look like?
Adding square footage (additions or finishing basements)
Adding bedrooms (especially prudent for new rentals)
Creating better living spaces (think open concept, less walls)
Improving the floor plan (again, bye bye walls)
Adding storage (family homes, this is a must)
And the list goes on. There are a million different ways to do this, it all depends on your house, your goals, the potential, your budget, your timeline and many other factors. Again, a professional can help guide you.
This is a place to start! If you want some guidance on how best to prepare your house for sale, whether that’s in a month or a year, I can help you move forward!
And again, if you aren’t going to sell your house and you are spending your money exclusively for yourself, then go nuts and enjoy!
Comentarios