Do you know if it’s smart to renovate your home before putting it on the market? I get asked this question often. Here are some of the main factors to keep in mind when deciding whether it makes sense for you.

Who is your target buyer?

When you think about your home as a product, you’ll be able to figure out who will buy it and what they want from it. For example, if your house is less than 2,000 square feet, located in a quiet residential neighborhood with good schools and designed for families with young children, the target audience is probably young families. The buyers will probably want a turnkey home so they can move in right away without having to renovate. If this is the case, then consider renovating because you should see a good return on your investment.

What’s happening in the market?

Another aspect of home renovation to consider is the state of the property market. If you’re looking to sell your home in the future, you might want to ask your realtor for input on whether it’s a buyer’s or seller’s market in your area—this way, you can make an informed decision about whether renovating will increase your home’s value.

What’s the condition of your home?

If your home needs a lot of modernization, think twice before renovating. This is obviously a personal decision, but taking on a large renovation can unveil a series of issues that could turn your home into a money pit. The tactic here might be to leave your home as is and reduce the price based on the need for renovations. While you won’t be able to sell for as high, it could be a savvy financial decision in the long run.

Some buyers might prefer to renovate the home themselves 

Many buyers can see themselves moving into a home and envision how they’d change it, from where to move walls to how to arrange furniture. Others find it difficult to manipulate a layout to meet their needs, therefore they prefer a home that already has the floor plan they desire. This is why you’ll need to determine which type of buyer will be drawn to your home.

In conclusion

When I’m asked this same question, I probably recommend selling a home in its current state more than buying a new one. I’ve renovated many spaces, and the number of issues that come from opening up walls can be exponential. 

Regardless of your choice, remember that living through a renovation is a stressful process, and it’s important to determine whether the financial gains will be worth the strain of a renovation. While it’s not always an easy decision, I hope this helps you make the right one.

How can Ahmad, mortgage specialist at AskAhmad.ca and the Total Mortgage Source 360 Team help you?

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