One of the joys of home ownership is being able to do pretty much whatever you like to your home.  If you want to put in purple carpets and paint the walls with happy faces, go right ahead.  That is, if you know you will be in your home forever and a day.  If on the other hand you think you may be selling in the next few years, you may wish to give some serious thought to the issue of payback on various renovations.

Some things, such as modest upgrades to kitchens and baths, will often have a good payback while other things such as landscaping are 50/50 in most cases.  Some things can actually create negative value or at very least, give very little payback when you compare your investment to your new home value.  Here is my top 5 list of ways you might lose money on upgrades:

1.  Over Improvement:  If you are in a subdivision where the average home has a value of say, $225,000, you shouldn’t put in a $50,000 kitchen nor should you spend $50,000 on landscaping the back yard.  The neighbourhood values will prevent you from recouping a full value.
2. Installing a Swimming Pool:  Chances are that the cost of the pool will far outweigh any benefit you would get upon sale.  First of all, you will severely narrow the number of buyers that may be interested in your home since not everyone wants a pool.  You know the rule about supply and demand.  As demand goes down with fewer buyers, so does the price.  Now on the other hand, if you are in a million dollar neighbourhood where infinity pools with waterfalls are the norm, it might actually be a good investment.
3. Things that get dated quickly:  Some home improvements are almost guaranteed to be passé in a short period of time.  Anything electronic such as a bulky surround sound or entertainment system, is likely to be a liability within a couple of years.  Same with very trendy carpet colours, light fixtures and counter tops.  For major investment items, it’s safest to stay with classic, tried and true improvements that have stood the test of time.
4. Bad Taste:  Oh my gosh, this is a tough one as taste is said to be personal but sometimes, it’s so bad that it would be safe to say the vast majority of the main stream public would agree.  For example, painting the walls of your living room black (don’t laugh – I’ve seen it) and installing a disco ball is not a really good idea.  Nor is dark green shag carpet in the bathroom.  If you are really not sure, please ask your friends and maybe a pro or two for their opinions of your planned upgrades.
5. Converting the garage into living space:  Most people would prefer the garage and if you are in a neighbourhood where garages are the norm, this is especially true.  If you really need more space, finish the basement or maybe it is time to move.
6. Not doing the upgrades properly:  I can’t tell you how often we have home inspections and then find out that a home renovation has caused problems with improper wiring, plumbing and even drywall.  We’ve seen footings give away, roof lines separate and other pretty scary consequences of bad renovations.  Use a reputable contractor and do it right!

Space planning, updating and transforming:  Arrange-a-room 

Interior Design App:  Mark On Call

Inspiration for ANYTHING home related that you can possibly think of: Houzz

 Related Posts:

 Consider Dumpster Diving
10 Free Planning Tools For Your Home

It is hard to do this and make a profit although certainly not impossible.  I’ve seen some people do it very well.  I think it is the fault of HGTV that has so many of us hooked on doing something they make look so easy.

There is one house in particular that keeps grabbing my attention.  For years, every time I drive past this wannabe castle in Meaford, I have the urge to paint the trim, clean-up the landscape and bring back the grandeur of what once was or must have been.  I’ve never been inside but can imagine that there are some pretty cool features to work with that have not stood the test of time too well. I’m sure this one would not work out too well for me but at least I can dream and be inspired. Here is a picture.

Earlier this year, I had a condominium listed for sale in a prime location opposite the Village at Blue Mountain and backing onto a private, wooded area.  The condo had 3 bedrooms, two baths and lots of living space at a price well below newer condos in the area.  This unit was clean but admittedly tired with passé décor and in need of an upgrade. You can see the BEFORE pictures below.  The asking price reflected this. During the time it was listed for sale, literally dozens of people viewed it and a few low offers came forward.  Everyone complained it was in need of an upgrade and they didn’t really want to spend the time doing that for fear they would not get their value back out.  Hogwash.

I bet many of those people who have since purchased, bought something and have done little to change their surroundings.  I also bet those same people have not built one cent in equity given that condo values have not gone up in and around the Village at Blue since then.

In contrast, along came a family with vision who bought the tired condo.  They knew the location was unbeatable, the price was right and with a good contractor, a complete renovation could be done and still bring them in under market value.  And so they did.

During a recent visit, the new owners explained to me that they had a total of four visits with the builder and the balance was done by email.  Some time of course had to be spent in finalizing the design and making product and colour selections but over-all, not a huge time commitment had to be put in.  They are both very busy professionals, living in Toronto with two young children as well.

Now here is the best part.  I would estimate that with the original purchase price along with the renovation costs, these astute owners have already built at least 20% equity in their condo if not more.  They have also dramatically increased the potential income should they decide to rent it out from time to time.  Their great sense of design, taste and courage to take on a renovation has really paid off.  Have a look at these BEFORE and AFTER pictures.

Canada Mortgage and Housing Corporation has “added environmentally friendly features to the Mortgage Loan Insurance it offers. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium, and a premium refund for a longer amortization period (if applicable) may be available.”

Similarly, Genworth offers ”a 10% refund of the Genworth mortgage insurance premium, access to Genworth’s Homebuyer Privileges™, an exclusive on-line discount program for commonly purchased household items, enhanced qualifying: Debt Servicing Ratios can be calculated using the estimated reduced heating costs as per the energy efficiency evaluation report” and states that the discount is available on all of their Mortgage Insurance products.

What does this mean to you, the buyer?  Here’s an example: 

The above example does not include any applicable provincial sales tax.

Each of these two insurers have criteria for qualifying programs under which the qualifying house must be built, or the houses must have an Energuide rating of at least 82 for any purchase closing after January 1st, 2013.  They will also consider homes which have been renovated to make them more energy-efficient.

Whichever insurer you choose, making your home more energy efficient has an added financial benefit with these programs, in addition to the money you’ll save in energy costs.  For more information on CMHC’s energy efficiency program, please click here.  For more information on Genworth’s energy efficiency program, please click here.

Some of the typical chemicals found in them include:
•    Benzyl acetate: Linked to pancreatic cancer
•    Benzyl Alcohol: Upper respiratory tract irritant
•    A-Terpineol: Can cause respiratory problems, including fatal edema, and central nervous system damage
•    Ethyl Acetate: A narcotic on the EPA’s Hazardous Waste list
•    Chloroform: Neurotoxic, anesthetic and carcinogenic
•    Linalool: A narcotic that causes central nervous system disorders
•    Pentane: A chemical known to be harmful if inhaled

The chemicals in fabric softeners smell so strong that they require the use of heavy fragrances just to cover up the smells. Then we heat them up too either in the dryer or on our bodies which then release the chemicals into the air both inside and outside our homes.

There are alternatives.  I purchased cloth dryer sheets at the local Environment Network shop and use them over and over again. They don’t eliminate ALL of the static but certainly enough that it is worth it for us. You can also try adding a quarter of a cup of baking soda to wash cycle to soften fabric and a quarter cup of white vinegar to rinse to soften fabric and eliminate cling.

A newly released study done in California concluded that energy efficient homes sell for an average of 9% more.  Based on a large sampling of 1.6 million homes sold in California between 2007 – 2012, the researchers were able to document that energy efficient homes did indeed sell for more.  Neighbourhood characteristics and demographics played a role in their findings.

The study was led by Matthew E. Kahn, an economics professor at UCLA, and Nils Kok of Maastricht University in the Netherlands.  According to a recent article in the Washington Post,   the researchers identified over 4,300 homes that sold with Energy Star, LEED or GreenPoint Rated labels. After adjusting for other factors that could influence value, such as crime rates, time of sale, amenities, etc, they ran an analyses to determine how much green labeling contributed to the selling price.  The 9 percent average price premium for green-rated homes is comparable to similar findings of studies done in Europe.

When the McGuinty government here in Ontario tried to implement mandatory energy audits and ratings for homes as they sold, REALTOR® associations and others fought the changes which were ultimately shelved in the Green Energy Act.  I have always been on the other side of that coin supporting the concept provided it is implemented in a proper way.  But that is all aside from the point at hand.

Owners should be comforted to know that energy improvements done today will not only have the potential to increase the value of their homes but will enjoy the benefits of lower utility costs while enjoying a healthier and more comfortable home.

You can read the full study by clicking here.

It’s always a pleasure to meet new people and to assist them in meeting their real estate goals.  If you would like to schedule a buyer or seller consultation with me, please feel free to contact me anytime at 705-446-1762 or send me an email.

The polling found a strong majority of Ontarians support standardized energy efficiency labelling of homes. Seventy percent of respondents said they supported standardized home energy labelling.

These polling numbers are even higher than data collected on a similar matter in 2009. At that time, when asked about their support or opposition to standardized home energy labelling, more than six in ten respondents (62%) stated that they support the measure, while less than three in ten (29%) opposed it. The other 9% did not know.
Home labelling is intended to allow individuals to calculate the energy efficiency of a home at time of sale, with the intent that consumers better understand the operating costs associated with their new purchase – the “second price tag.” Properly insulating a home is one of the most cost-effective measures a homeowner can do to increase their home’s energy efficiency.

Jay Nordenstrom, Executive Director of NAIMA Canada, noted, “We closely monitor energy efficiency trends, public opinion, and government policy both here in Ontario and across Canada. While we are not surprised by the increase in support for home labelling, we remain concerned that the energy debate continues to centre on energy production instead of conservation. This poll demonstrates there is an increasing knowledge that the least expensive and cleanest energy is saved energy.”

The lack of progress in home labelling was recently addressed by the Environmental Commissioner of Ontario in the Annual Energy Conservation Progress Report – 2011 (Volume One). According to the report, homebuyers’ access to information about a home’s energy use is limited.

“Ontarians are ready for regulated energy efficiency labelling to one of the most expensive purchases they will ever make in their lifetime – their home,” Mr. Nordenstrom concluded. “They want to know how much a home costs to operate and what they can do to improve their energy efficiency, decrease their utility bills, and increase the value of their homes.”

NAIMA Canada commissioned Oraclepoll Research Limited to conduct a survey of 1,000 randomly selected Ontario residents. The interviews were conducted via telephone between August 2 and August 8, 2012 (the margin of error for this poll is +/- 3.1% 19/20 times).

                             ————–

I’ve been reporting on this trend for years now on the blog and it is clearly gaining traction.  I’ll say it again.  If you won a home you plan to sell one day, it pays to invest in making your home as energy efficient as possible both in terms of your operating costs and your equity.

It’s always a pleasure to meet new people and to assist them in meeting their real estate goals.  If you would like to schedule a buyer or seller consultation with me, please feel free to contact me anytime at 705-446-1762 or send me an email.

Concerned with high-performing, healthy green buildings, homes and communities throughout Canada, The Canada Green Building Council’s President and CEO stated, “We would like to congratulate the Town of The Blue Mountains on their LEED Gold Certification.  Building a town hall to such high sustainability standards is not only responsible, but it sets a great example for the residents of this community. It tells them that their   community officials are “walking the talk” and care about the environment.”

Mayor of The Blue Mountains, Ellen Anderson, said of the award:  “We are honored to be recognized by the Canada Green Building Council for our commitment to preserving our natural resources.  As a corporate citizen and community committed to sustainability, we feel this project stands as a testament to our values and commitment to making a positive difference in sustainability.”

According to their website, The Blue Mountains noted that some of the green features of the new townhall include:

• Distributed ground source heat pumps to provide heating and cooling with annual energy usage 67% less than that of the Model National Energy Code for Buildings in Canada.
• 93% of regularly occupied spaces have access to natural lighting and 97% have access to views to the outdoors.
• Utilization of storm water harvested from the roof of the building to flush toilets and urinals.

According to the article on The Blue Mountains website, the Town of the Blue Mountains not only received the LEED® Gold, but also received grants totaling $4,971,680 towards the construction of the building,  representing some 70% of the $7,000,000 (approx.)  construction cost of the building.

The Town Hall will be formally opened on July 4th 2012, from 1:00-4:30 p.m. with a public open house celebration.

Homeownership Program

Designed to assist renters in purchasing their own home, a forgivable loan of up to 5% of the purchase price may be available. Eligible homes would be modest in comparison to current norms, and cannot exceed a purchase price of $175,000 for Grey County or $207,300 for The Blue Mountains. Maximum household income is $66,200 to be eligible.

An added benefit to the program is helping to ease the demand for rental housing by helping to turn some renters into homeowners. To be eligible for the program, applicants must currently rent in Grey County, and must intend for the purchased residence to be their principal residence and it must also be in Grey County. Resale or new housing qualifies as does detached, semis, towns, condos, stack, row or apartments and duplexes. Home inspections will be required of the purchased property.

Approved eligible purchasers will be assisted with a downpayment assistance loan which will be forgiven after 20 years. Income must be proven. The assistance will be provided at time of closing, when a mortgage can be registered.

Repayment will be required if the homeowner is in default; if the unit is sold, or if the unit is no longer the principal residence, before the 20 years has elapsed.

Any repayed funds are redistributed.

Ontario Renovates

Assisting low to moderate income households, the Ontario Renovates program helps Grey County homeowners to repair their home and increase the accessibility of their home through modifications and adaptations. According to their website, Grey County says, ‘major repairs could include but are not limited to heating systems, doors and windows, roofs, electrical systems and plumbing. Modifications for accessibility could include ramps, handrails, chair and bath lifts, cues for doorbells and fire alarms.”

Secured with a promissory note, forgivable loans of up to $15,000 may be provided for repairs. Repayment would be due if the property is sold within 10 years of the loan advance. The County says, “the forgiveness of the funding occurs at an equal rate over the 10 years. Any funds returned will be put in a revolving fund for Ontario Renovates. Grants are provided up to $3,500 for accessibility modifications and adaptations.”