The Dangers of Over-developing a Home

HGTV is an amazing thing. In my opinion it has truly changed many industries. It’s particularly noticeable in the Real Estate industry both with buying and selling homes, as well as simply putting your stamp on your space to live. Decorating has always been a big industry, but it’s now more attainable with the DIY aspect to everything. Staging is another thing that has skyrocketed, particularly with selling homes. It helps immensely with showcasing the features in a home. The thing is, though, that all this decorating, staging, and TV program watching has led to raised expectations when people are looking at homes. People either expect a certain level of “move-in-ready” décor with everything done and staged, or they look for homes that need some work and get excited. Buyers and investors can sometimes get big ideas in their heads about “flipping” homes and making mad money; or just living in a home for a couple of years, fixing it up as they go, and selling it to make mad money etc. Be careful with this.

I’m all for buying a home based on its bones, with minimal attention paid to aesthetics. Paint, flooring, fixing up etc. can always be chipped away at later. It’s more important to me that a home is solid, warm and dry. That being said, it can be really dangerous to buy a home with the intention of renovating/ redecorating it and then making a profit on it later. It’s really important to do your homework and pay attention to the size & style of home as well as neighbourhood in which you are purchasing. For example, some types of homes and neighbourhoods have a cap or ceiling that could come into play when coming up with a selling price. The simple math is that you shouldn’t put more into the home than you will foreseeably make back. Galvanized scews, expensive granite, hardwood flooring, and composite decks are all wonderful things, and can indeed make a home more SALEABLE, but not necessarily more VALUABLE.

If you really want that granite, custom cabinets, and other fancypants details – go for it! Just do it with the intention of enjoying it, and know that it might not get you a penny more for your home. It may get you more traffic of interested buyers looking at your place, but the price may not necessarily go up. You can guild everything in gold, but if your home isn’t in a “high end” neighbourhood…it could be a wasted investment. If you will live there long enough, the price may wash. I’d LOVE to add hardwood floors, new countertops and a garage to my wee West End home, but the likelihood is that my family will outgrow it in a few short years and I wouldn’t be able to add $30-40,000 to my list price. There is only so much a home will sell for, savvy?

Another point is the “Swiffer society” I’ve mentioned previously. At the moment everything seems to be disposable. Your new kitchen or bathroom may be absolutely stunning, cutting edge, and brand new! However, if the buyers of your home don’t find it to their particular taste, it may very well end up getting ripped out anyway so that they can do their own thing. If that’s the case, they may not be willing to consider the cost of that granite or new kitchen etc. when coming up with an offer. So when renovating, think about whether or not you plan to do it for YOU, or for selling. Maybe don’t go super high-end on your renovations if it’s just to put the home on the market.

These points should all be taken with a grain of salt, as there is nothing absolute about this. When in doubt, ask a professional! I hope that this helps clear up some confusion and maybe gives you something to keep in mind when dealing with what may be your biggest asset.

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