How do you choose between selling and renovating your home?

Many households wonder whether they should sell or renovate their home when it no longer meets their needs. Several factors, such as costs and impact on daily life, need to be taken into account before making a decision. It’s also important to consider the current state of the real estate market, as this can influence […]

Many households wonder whether they should sell or renovate their home when it no longer meets their needs. Several factors, such as costs and impact on daily life, need to be taken into account before making a decision. It’s also important to consider the current state of the real estate market, as this can influence the final choice.

How do you decide whether to move or renovate your current home?

Opting to sell and start afresh can be the right decision for many homeowners. This may be the case for those whose property’s condition doesn’t justify the renovation efforts and investment of time and money.

It may also suit those who prefer to avoid major renovation work, as well as those whose rooms are too small or the house too big for their needs.

Before making this decision, it’s crucial to draw up a list of requirements for the new home. What features or improvements do we want in our next home that aren’t available in our current one? For example:

An extra bathroom
Extra storage space
A neighborhood that suits us better

It’s also essential to take into account all the costs associated with selling, moving and buying a new property. These costs can influence the final decision and must be taken into account in the overall assessment of the situation. The expenses associated with renovation are often more obvious, but it’s important not to underestimatethe costs associated with selling your home. These can include:

– Paying a commission to a real estate broker

– Costs of minor renovations and maintenance to prepare the house for sale

– Notary fees

– Production of a certificate of location

It is also crucial to consider other expenses related to the purchase of the new home, such as :

– Moving expenses

– Connection fees for services such as TV, Internet, Hydro-Québec

– Transfer duties (Welcome tax)

– Home inspector fees

In some cases, depending on the extent of the renovations required, selling and buying a new home may be less expensive than undertaking major work.

The main benefit of selling is the opportunity to relocate to a home better suited to your needs, without having to undertake major renovation work. However, this decision can also involve a mental commitment on the part of family members. For some people, a new property investment is an essential moment in their life. In some cases, this stage can be complex and tedious.

In addition, it is essential not to underestimate the emotional attachment to the property and the memories associated with it…

Consider the real estate market before choosing

The current state of the real estate market is one of the crucial questions to consider when deciding whether to sell or renovate your home. It is essential to ask: what is the current market demand? Is this in my favor, as a seller? If you’re planning to move, it’s important to find out how strong the market is and how long it usually takes to sell. This will help you determine whether selling is a viable option to meet your needs in the short to medium term.

In addition, it’s crucial to consider whether the work required to modernize your property could deter potential buyers. Most buyers prefer to acquire a ready-to-move-in home, with no major work required.

In short, if your neighborhood is in demand, selling is likely to be more advantageous than renovating your property, provided the cost of buying a new home isn’t comparable or higher. On the other hand, if your neighborhood is in a balanced or buyer-friendly market, it’s a good idea to compare the costs and time involved in renovations with those of selling, buying and moving in order to make the best decision for you.

Selling a home in need of major renovation can present special challenges. Follow our advice to present your property to buyers with transparency and take the necessary precautions to avoid future problems.

Renovate: give your home a facelift

Opting to renovate your current property is the ideal solution for homeowners whose house is located in a sought-after environment where they plan to stay for the long term. It’s perfectly feasible to undertake work that will improve both your comfort and the value of your property.

This depends, of course, on the type of renovations envisaged, the associated costs and the time needed to complete them.

Renovation costs

It’s essential to understand the potential costs of the planned renovations. Start by defining your needs and expectations, then consult several reliable contractors for detailed estimates. You will need to budget for a number of aspects, including :

Professional services (architect, designer, etc.)
The workforce
The materials
Permits required
Decoration and furnishings
The unexpected
Rental of storage space, if required

Some work, such as plumbing, wiring or drilling, may entail additional costs. It’s a good idea to consult a certified appraiser to estimate the potential return on investment before undertaking any major work.

Renovating your property and increasing its value may also entail related costs, such as changes to your home insurance or higher electricity bills.

Renovations involve a drastic change in the daily life of the home: often dust, noise and potential unforeseen events. As exciting as they are, they require us to make many decisions, face up to major expenses (with or without financing) and meet tight deadlines .

Managing the financial and personal stress associated with this period can be difficult. So it’s crucial to prepare yourself mentally for the disruption to your routine, and even for the tensions within the household during the work.

To enhance your renovation experience, here are a few useful tips:

Plan your project carefully
Communicate effectively and listen to your family’s needs
Willingness to be flexible and adapt to change
Taking breaks and planning vacations to decompress
Taking care of yourself and staying physically active
Spend time outside the home whenever possible

Despite sound recommendations, renovations are not for everyone. They require the ability to manage stress and be available. For some, it may be preferable to opt for less extensive work, or simply to refresh the property. However, if you decide to embark on the project, bear in mind that the inconvenience is only temporary and the results will certainly be worth it!

Payment for renovations

There are several options for financing your renovations:

Use your available savings
Opt to refinance your mortgage, allowing you to borrow up to 80% of the market value of your home, depending on the equity you hold.
Consider a mortgage line of credit
Search for a line of credit or personal loan
Use a credit card for renovation expenses

It is advisable to discuss your options with a financial advisor to select the best financing solution. In addition, there are several government and municipal subsidy programs to help homeowners modernize or green their property.

Renovate to sell

Opting for renovation with a view to sale represents an alternative to simply renovating or selling the house as is. The aim is to improve the property’s condition and attractiveness in order to increase its market value. A renovated home is generally more likely to sell quickly. What’s more, some uncorrected defects, such as a damaged roof or faulty insulation, can diminish a home’s appeal to potential buyers. A pre-sale inspection can help you target any necessary renovations .

According to the Appraisal Institute of Canada, some renovations offer a better return on investment than others. For example, renovating a kitchen or bathroom, as well as repainting the interior and exterior of the house, can considerably increase the value of the property.

On the other hand, landscaping or the addition of a solarium generally have a more subjective value in terms of return on investment.

If you’re thinking of buying a home to renovate and resell, it’s important to familiarize yourself with Canada’s “anti-flip” rule. The costs associated with renovation, combined with potential taxes on gains, could exceed the profit on sale, so it’s crucial to assess the profitability of your project.

The “anti-flip tax” is as follows: the profit realized on any sale of residential real estate held for less than 365 consecutive days (hereinafter “precipitous resale”) will now be considered as business income.

A personal decision

As you’ve seen, many financial, emotional, family and societal factors come into play when deciding whether to sell or renovate your home.

Each situation is unique and ultimately depends on the budget you’re prepared to invest, the current state of the real estate market and your present and future motivations.

Before committing to either option, take the time to assess your situation, lifestyle and needs, and consider the potential impacts of renovating or moving. Because there are pros and cons to every decision.