Expand your thinking! Your home is your Asset.
Life happens for us, sometimes creating new opportunities! Take this for an example, you love your home, yet a job promotion is taking you out of town, calls for you to put your home on the market for sale. Can you tally up all those renovation costs and add it on to your home’s list price? Unfortunately, It’s not that simple to just add your costs to your selling price.
Why is it not that simple to add up all your renovation costs to the listing price?VALUE! What is value? there are upgrades and then there is maintenance. Know the difference, this could save you tens of thousands of dollars. Let's talk value. There are different definitions depending on the perspective. So if a Bank is doing their assessment, the value is more like replacement value but still considering what the market has to offer to an extent. So your property will be reflected with other recent solds to come to a value. However, what a Buyer is willing to spend is usually a higher risk assumption than what the Bank is willing to assume as risk. Where you may think there is higher value, for example, a large deck, to a bank, this doesn't provide much weight to the overall price but it might to a Buyer on the open market. This is an important lesson to learn as it will help you make smarter investment choices in what you should renovate around your home. We should all know and appreciate that the largest return on your investment is always in your bathrooms and kitchen. The Bank recognizes a 100% value or in other words, a recovery in the renovation costs.
I always recommend new and existing clients of mine to reach out to me before renovating. I am your real estate resource for a reason, my job isn't just to sell your home. But my job is to provide value and help you understand that your home is a financial asset. Now, how can we maximize this assets value? It's true, we can't just add up what you spent renovating your home. We need to focus on what Buyers preceived as value and what the bank will preceive as value. Keep in mind that these are two different values, so depending on what your goals are, we can have two different action plans. We will examine what makes the most economical sense when renovating and where you will gain the most value. This is why I can't stress enough the importance of having the conversation with you about your goals because this will help us design an action plan that will provide value and create leverage to get you to that goal! A key part is understanding your positioning in today's market and how that can create opportunities or barriers for you in the market. We will discuss risk mitigation and strategic planning for all options available to you. Now everyone’s positioning in the market is unique, you may be in a situation to do a renovation in hopes to build equity to use for a larger down payment on another house or maybe you just want to add a cash flowing rental property to your protfolio. Be careful with the difference in what the bank appraiser has to say your home is worth versus an educated or willing Buyer can offer you. These factors are part of the market conditions we will discuss when doing our due diligence in preparing a risk mitigation and strategic planning analysis. It sounds like a mouth full and you're probably wondering why you should entertain this? "Can't we just place it on the market, it's a hot market, everything is selling!" Sure, that's an option too. But with better preparaion than the competition will set you apart and only increase the value in a high demand market with lazy listings. But did you put some thought into your goals? What are you aiming to achieve? How are you going to raise the most capital in the most efficient way? Which resources have you considered? Don't be intimidated, I am your resource and will provide you with the tools and network that you will need. This is how I provide value to my clientele. I love knowing that I can educate my clients on the value of their home, how it's an asset and how we can use this asset to invest in you.
Start Investing In Yourself.
You might be sitting on a great opportunity to expand your investment portfolio. Remember that your home is also your asset so use it as a tool to invest in yourself. How? Think outside the box. Maybe trying an addition, renovating your bathrooms or kitchens, finishing your basement. What some people don’t consider, is taking advantage of the new City of London Ontario bylaws regarding secondary dwellings right in your own home. But remember before you start, to reach out to me, draft a cost-benefit analysis of all your options before you start. Do your research, let me help you.
Whether you are looking for a creative way to get into the market, or just need a little extra cash to change your lifestyle, want to travel more? Maybe just work less and start working on that hobby you always loved but just didn’t have time to do. There’s so much more to life than paying a mortgage. Are you up for your next chapter?