The housing woes facing the Canadian populace aren’t going away anytime soon. Even if the production of new homes ramps up massively in the near future (which is no guarantee), it will still be years before it makes an impact. This makes it really hard to recommend moving as an option for those dissatisfied with their homes, and easier to recommend renovation.
By taking a property you already own and overhauling it, you can shape a house to perfectly suit your needs. Depending on what you do, though, you can raise or lower the market value of your house, and even impact how much you’ll be charged for home insurance. In this post, we’re going to explain how several particular renovation efforts can impact the value of your house and home insurance costs. Let’s get started.
Improved outdoor areas can add significant value to your house
If you have the opportunity to make clear space for a respectable garden, it will prove worthwhile when it comes to home value. Now that remote working is common, people have more time to spend outside, and many are choosing to cultivate gardens and even grow their own produce. There’s only so much you can do if you don’t have any private outdoor space, but if you have even a yard to yourself, you can enhance it substantially.
If you’re going to do this, focus on greenery, because that’s what really matters to people. Soil matters enormously: being able to offer high-quality topsoil will make your garden area (however small) very tempting for budding gardeners. You should also think about shared garden space. If there’s a substantial patch of greenery between several houses, teaming up with your neighbours is an option: you can work together to change the quality of the soil by devising a schedule for applying organic fertilizer. The effect will build up over the months.
Niche internal additions can reduce house value
What do you dream of doing with your house? Maybe you really like the idea of turning a room into a jungle gym or setting up an impressive home cinema. Before you commit to something like that, think carefully about how it might affect the value of the property. This is necessary because keeping things simple is often the best for property prices. When people go looking for houses, they often want clean slates so they can change things however they like.
What if someone who comes to look at your house doesn’t want a jungle gym and would like that room to be a home office instead? Before they made that happen, they’d need to undo what you’d already done, adding to the cost. So if you’re determined to raise the value of your property by making internal changes, make sure they have broad appeal.
Updated systems and architecture can reduce insurance costs
One issue that can raise insurance costs is the retention of old utility systems or obsolete architectural features. Ancient electrical wiring is a major safety hazard, for instance, as is the use of certain types of building materials: For example, a building with an old-style thatched roof will always prompt higher insurance costs because the risk of damage will be so much greater.
The challenge with addressing these problems is that it can be expensive and complicated. Having your entire plumbing system modernized isn’t going to be cheap, of course. But in addition to bolstering the value of your home (being able to mention that work in a house certainly wouldn’t hurt), it can earn you some lasting insurance savings.
Luxury materials and extensions can raise insurance costs
When surveyors or insurers look at the value of a home, they don’t focus on market listings: Instead, they focus on replacement cost. In other words, how much it would cost to completely rebuild the house from the ground up, covering everything other than the contents. The less it would cost an insurer if the entire house burned down, the less they’ll charge you to insure it. Now, there’s only so much you can do to take advantage of this, but you can do a number of things.
Most notably, you can stay away from luxury materials. You might like the idea of spending an absurd amount on the most prestigious floorboards you can find, but it’s going to cost you much more in insurance. Concentrate on practicality. If you can get the same structural strength with cheaper wood, use it, then cover it up. You won’t see it, and you’ll be able to negotiate a better rate. You can also be careful with extensions. Investigate how much an extension would cost you, how much it would add to the value of your home, and how much it would raise your rates. If it doesn’t seem financially justifiable, you might want to hold off.
→ Check out the ultimate guide to homeowners insurance
In summary, renovations can prove financially detrimental or beneficial in the long run. It just depends on what choices you make. Provided you’re aware of what each decision will cost you, you can proceed with your eyes open and reach informed conclusions.
