Should you renovate or relocate?
10 questions to ask
1. What do you want in your new home?
Start by compiling a list. Do you need a bigger kitchen, more bathrooms, or just more space overall? Can you move your growing kids to the basement apartment, or do you need that monthly income? This will help you determine if it’s more beneficial to renovate or to relocate.
2. Do you like your neighbourhood?
If you love your current neighbourhood and your neighbours, then renovating might be your best choice.
3. Is your current home a good long-term investment?
If you live in a sought-after location, but find your house is a bit too small, renovating now could pay off down the road by increasing your home’s value. A renovation is a good investment if you plan on living in your home for the long haul or in “hot” markets like Vancouver, Toronto and Montreal.
4. What are the most cost-effective renovations?
Kitchens, bathrooms, finished basements, new flooring — these four items are likely to give you a great return on investment. A well-designed, functional kitchen is not only a pleasure to cook in, it adds long-term value to your home. You can also increase your resale value by replacing the furnace, roofing and old windows. Enlarging the living space by tearing down walls or converting the attic into a rec room or extra bedroom is another good choice.
5. How much will it cost to move versus renovate?
Work out the cost of buying a new home. Remember to factor in any renovations needed at the new place, plus moving costs, land transfer taxes (in most provinces) and real estate fees. If your budget doesn’t add up, renovating might make more sense.
6. How much will renovations cost?
Talk to different contractors to get a general idea of the cost. The average renovation costs $200 per square foot, but it is wise to add an extra 15 to 25% to your renovation budget just to be safe. You may need to calculate even more if you’re digging down to expand the basement, or if you’re reconfiguring the kitchen with new plumbing and wiring.
7. Do you have a good contractor?
When hiring a professional, do plenty of research ahead of time – call for references, ask around, get a number of quotes, and check the contractors’ track records on a reputable website such as RenoMark or Reno-Assistance. And always make sure that the contractor you’re hiring has professional liability insurance.
8. What condition is your house in?
Unfortunately, some homes might not be worth the time and money that renovating requires. This might be the case if you’re dealing with foundation cracks, low basement ceilings, knob-and-tube wiring, or bedrooms that are just too small. Banks don’t finance demolition work either, so be sure you have enough money on hand for that expense.
9. Can you deal with renovation stress?
Many people find living in a construction zone for a few months is just too much personal and financial stress. If you have limited patience or a limited budget, you might want to try a home ‘refresh’ rather than a full-blown renovation. Why not give your kitchen a facelift by painting cabinets, changing your backsplash and replacing cabinet hardware?
10. What about “green” renovations?
Upgrading your windows and heating systems to make your home more energy-efficient is always a good investment. And Canadians can take advantage of federal programs, as well as provincial incentives and refunds for energy-efficient renovations. And be sure to tell your insurer if you’ve recently installed energy-efficient windows or heating systems, as you may qualify for savings on home insurance.
Move or improve?
There’s a lot to think about when deciding to move or stay in your current home. If your house is too small, too large, or in the wrong location, then relocating might be the right move for you. On the other hand, if you like your neighbourhood and your home, renovating can both improve your home’s value and let you enjoy your home for longer.
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The Personal refers to The Personal General Insurance Inc. in Quebec and The Personal Insurance Company in all other provinces and territories.
The information and advice in this article are provided for informational purposes only. The Personal shall not be liable for any damages arising from any reliance upon such information or advice. The Personal recommends using caution and consulting an expert for comprehensive, expert advice.