Question:
I have inherited a 25-year-old loft condo in a desirable Toronto lakefront location. It is in remarkably good condition but dated. Should I tear out the broadloom and invest in hardwood floors and a new kitchen before I sell? Will I recoup my investment or perhaps make a greater profit? In today's market would a dated condo in a desirable building and location still appeal to buyers who are willing to pay a little less but do their own renovation?
Answer: I'm always a fan of renovating to unlock potential value in a property. Especially in the competitive Toronto landscape – where sellers are doing everything they can to earn top dollar for their homes.
Now, before I go any further, some words of caution before you break out the sledgehammer and start ripping up carpets. Check your condominium rules and regulations to see what kinds of renovations can be done, and to what extent.
From my experience, the buildings on the waterfront you are referring to do allow for the type of renovations you are contemplating. But please do your own verification before proceeding with any work!
Renovate to the level and value of the unit. That is, don't put in a kitchen that belongs in a million-dollar unit when the value of yours is closer to $500,000. People tend to go overboard when doing renovations and little things quickly add up. Keeping to your budget and conforming to the norm of similar units should allow you to realize a balanced return on investment.
Kitchens and bathrooms tend to yield you the best return on your investment. Think about the emotional response you have to a stunning kitchen or bathroom when you walk into a home. They definitely become the focal point of conversation.
Replacing carpet with hardwood can be relatively inexpensive, especially if you opt for prefinished hardwood instead of traditional untreated wood that needs to be sanded and stained. If you are replacing the flooring for the purposes of resale, don't go for top-of-the-line material, as you may never realize your return on investment.
I stay away from laminate because I think they have a very cheap look to them. The difference in cost between prefinished hardwood and laminate could be as little as $1 to $2 a square foot.
Previous listings can be a good indication for what kind of money renovations can yield. Keep in mind that there is no replacement for seeing something in person, so factor this in when drawing any conclusions. Ideally, you should see other available units that are renovated and those that are not to give you some real-world context.
There is a small segment of the market that is specifically looking to unlock some of the potential of these older condominiums through renovations. The same strategy mentioned in the previous paragraph about historical data and current listings may help. But you can't go too wrong with renovations if you plan right and renovate to the value of the property. A finished and updated home will always have the greatest appeal to the broadest range of potential buyers.
Ricky Chadha is a broker with Royal LePage Estate Realty in Toronto, and specializes in applying social media and other digital tools to the business of real estate. You can find Ricky on Twitter @your416 or at his website RickyChadha.com.
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