I got the idea to write this blog from this National Post article. A reader asked designer Jeffrey Fisher if she should convert her third bedroom into a walk-in closet. If you ever want to know the impact such a change will have on the value of your home, don’t ask your designer, ask your trusted real estate agent.
We are regularly asked to advise homeowners on the dos and don’ts of renovating to increase the resale value of homes. We donate our time willingly because we would rather you ask us before you spend your hard earned dollars thinking you have increased the value of your house when in fact you have lowered it. So here are common dos and don’ts of renovating to increase the resale value of your home.
Convert a bedroom into a closet
If you converted one of your three bedrooms into a walk-in closet, you have lowered the value of your house. Land transfer taxes and realtor commissions alone make moving very expensive so today’s buyer is looking for a longer term house. Many buyers outgrow the typical first time buyer three bedroom house soon after they have a child or two so fewer buyers are reluctant to invest in a two bedroom home when they know they will have to incur moving expenses in the foreseeable future.
Of course the buyer can always convert the space back to a bedroom but they will be reluctant to do so if you have fancy built-ins that need to be ripped apart to do so.
As well, if you’re going to convert a fourth bedroom into a walk-in closet and you want to do it for your enjoyment then go ahead but recognise that you have lowered the value of your house in this instance as well. This will eliminate the move up buyer from being interested in your home who generally look to buy a four bedroom house.
You are better off, in both circumstances, making your bedrooms slightly smaller, if the space allows, and install wall to wall closets and leave the number of bedrooms intact.
Convert the only four piece bathroom on the second floor to a three piece
Recently we appraised a large four bedroom move up buyer home whereby the owners converted the only four piece bath with a tub to a three piece with only a shower. These owners have eliminated a few potential buyers from being interested in their home as well. Most move up buyers have children and they want bathtubs to bathe them in. It is true that the buyers can install their own bathtub but if you have just renovated the bathroom, the buyer will be reluctant to pay you for your renovated three piece when they have to rip it apart to put in a bathtub.
Renovate kitchen without opening wall to dining room
Many times we show houses to buyers with beautifully renovated galley kitchens that do not overlook the principal rooms. The majority of buyers want open spaces overlooking the main floor so this style reduces potential buyer interest because they don’t want to pay you for a renovation they will undo. It is more expensive to renovate a kitchen and open up walls but, if you can afford it, you will recoup your investment when selling. I have to qualify this, though, by saying that if you bought your house recently in a bidding war paying a hefty price AND you are considering selling it in a few years, you may not recoup your investment from this level of renovation.
Renovate house and leave knob and tube wiring
This is the biggest faux pas of all. Buyers dislike renovated houses that have knob and tube wiring. We all know how insurance companies feel about knob and tube wiring so why not go the extra step and remove it completely while renovating? Many buyers will not make an offer on your property if it has knob and tube wiring and less offers on your house means a lower sale price.
Renovate and leave popcorn ceilings and walls
Popcorn ceilings and walls are as passé as the rotary phone or smoking on airplanes. Buyers dislike popcorn ceilings and walls. You can either drywall or skim coat the walls and ceilings if possible. It is costly but it will attract more buyers to your house when the time comes to sell it.
Renovate and not install closets in bedrooms
Believe it or not we see many houses renovated from top to bottom with zero closets in the bedrooms. This oversight, when renovating, eliminates a huge pool of buyers interested in your house as well.
Everybody seems to be a renovator or house flipper today. We see many quality renovations and many shoddy ones too. If you`re going to flip a house and you want to get the best price possible, these are just a few of the things renovators overlook which buyers want.
Front door closet
Many houses that are flipped in Toronto sell for over a million dollars. Buyers are turned off when they have to spend this kind of money and they don`t even have a place to hang their coats.
If you can find the space for a main floor powder room, this will increase the desirability of your house and its value.
Today the modern family wants to be a part of the action. They don`t want to be cooped up in the kitchen and not be a part of what is going on so tear down those walls and give buyers what they want. At the very least make door openings between principal rooms larger.
Large organized bedroom closets
Closets for clothes and storage are not just popular, they are a necessity to maximize the value of your house. Having your closets professionally organized just adds to the appeal of the home.
Decent size bathroom with storage
Buyers love luxurious and large bathrooms with ample storage. Sometimes if the bathroom you are renovating is small, you may be able to take a foot or two from an adjoining bedroom to enlarge the bathroom space. I know as a builder or renovator every change you make dips into your bottom line. But a small or badly designed bathroom will attract fewer buyers and cost you in the end. Don`t forget to install a vanity with storage. Buyers penalize lack of storage in the bathrooms.
Lowering the basement
This can be a very expensive proposition but I can’t tell you how many times we hear that a buyer is not interested in a house we have for sale due to low ceiling heights. If your ceiling height is less than 6 feet 8 inches, then finishing your low basement does not have a very high return. Buyers will pay for a basement with ceiling height over 7 feet because this finished, well organized space may buy them more years in the house. Also try to accomodate an area in the basement for a nanny or office. These features could increase the pool of interested buyers for your home.
If you’re working with a clean slate when finishing the basement of your first time buyer home, it's a good idea to plan the layout so that the laundry room can be shared easily between a basement tenant and the main floor if the future owners wish to rent the basement. Prices being as high as they are today, first time buyers look for these options to supplement their big mortgages.
So if you`re thinking of renovating your home to increase its value, feel free to call us for advice before you embark on this expensive venture which may or may not pay off.