HGTV - Channel 17 in Fernie. A television network dedicated to home renovations and improvements. There is no question of its popularity (#7 in specialty channels); it seems all Canadian homeowners are “reno crazy”.
Here are a few things to consider before you begin your next reno project:
1. Overbuilding for the neighbourhood. It seems impossible to build much smaller than some of the houses in Fernie, but try and keep in mind resale when undertaking a major reno or new build.
Homebuyers, and some more learned REALTORs(r), establish the value of a home based on the comparables in the neighbourhood. In general, homebuyers do not want to pay $450,000 for a house that sits in a neighborhood with an average sale price of $350,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $450,000 in a $450,000 neighborhood. The house might be beautiful, but any money spent on overbuilding might be difficult to recover unless the other homes in the neighborhood follow suit.
Have a drive through the Annex, Downtown or West Fernie to see what I mean - try not to be the best house on the worst street.
2. Hot Tub/Swimming Pool
A hot tub will not always increase the value of your home. This depends dramatically on the buyer and what his or her preferences are. If this potential buyer has always wanted a hot tub, then it is a great investment. If the potential buyer does not care for hot tubs, then he or she is not very likely to pay extra for the accessory. Many people do not see hot tubs, saunas, swimming pools, etc. as being great additions to a home and/or see them as increasing the value of the home.
In addition, young families don't want to worry about their small children around an open body of water. Spend your hard earned money in other ways to increase the value of your property.
3. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home's value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.
4. High-End Upgrades
Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the 60’s. Upgrades should be consistent to maintain a similar style and quality throughout the home. A home that has a beautifully remodeled and modern kitchen can be viewed as a work in progress if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.
In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.
5. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice -- or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
6. Big Box Renos
Be very mindful in the choice of materials for your renovation. In general a more neutral color pallet will appeal to more buyers but you also don't want it to look to bland and institutional. Avoid buying all of your material off the shelf simply because it is affordable. Invest some time generating creative ideas before you start buying your materials.
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