Growing up as the child of immigrant parents who started with very little I was taught the value of money at a very early age. This was followed later by a tutorial on budgeting and the importance of sticking to a budget to meet my financial goals. These basic skills have proven invaluable as my big financial purchases have evolved from a ten-speed bike to a rebuilt urban home.
Where big purchases are concerned, budgeting is crucial but so is getting the purchase right. The often cited examples of big purchases are homes and cars. Big home renovations are another, especially for those living in older urban homes. Here are some tips to help you get that big home renovation purchase right.
Understand the possible needs of your house
While we are all familiar with our wants/needs as homeowners, we are often unaware of the needs of the home. Sound strange? Ask friends who have renovated older homes. Most will have seen the scope of their project grow as house ‘needs’ were uncovered during the renovation. These issues can arise from the age of the house or prior renovation projects that weren’t done right. For example, in the course of replacing flooring, one family I know discovered their upper floor did not have adequate structural support and they had to take immediate measures to rectify the issue. While the family was motivated to ensure their own safety, the changes were also required by the Ontario Building Code. This kind of discovery is quite common in older houses.
Know and understand the different options
When changes to the home are required, there are three options: move, renovate or rebuild. If you want to stay on your property, your options narrow to renovate or rebuild. If you renovate, the existing home is the backbone of the project. Rebuilding is different, as the existing home is demolished and the new home is built from scratch. This difference can have a profound effect on the level of associated risk and uncertainty.
Renovations, especially where older houses are concerned, are uncertain and harder to budget for because the underlying structure of the house can represent a lot of unknowns, which, in the course of a major renovation, become exposed and require repair. You don’t want to layer something new on top of something old and worn out. Also, the Ontario Building Code requires all areas of older homes that are touched by a renovation to be brought up to current Code. In contrast, if you demolish the existing home and rebuild, you eliminate the potential for these issues, and the associated risk and uncertainty.
Determine which option provides you with the most value
The option that provides you with the most value will depend on the existing condition of your home and the required changes. If your home needs a lot of work (i.e., more than the value of the building itself), the better decision may be to rebuild. Learn about the value of the structure versus the value of the land.
This analysis may lead you to consider a larger project than you initially thought, but once complete will transition your house from burden to advantage. Your home is supposed to be your retreat. The place you go to refresh and rejuvenate so you are happy, healthy and have the energy to pursue your professional and personal dreams. Will a renovation lead to this outcome? Or, will it continue to generate stress because its underlying structure, design and age will always frustrate you? How about other members of your family? What stresses them, will stress you.
A big home renovation is a huge purchase.
Don’t underestimate the intangible value of a home that works properly. Learn more about the renovation or rebuild process to get that big purchase right by contacting me. I’d be happy to help.