Quote:
Originally Posted by SeeBass
I thought I would run this question by you guys:
I have a friend that has a $400K, 1956,1100sq ft bungalow home in one of the better streets in Thorncliffe.
They are looking at either knocking it down or renovating it and creating a much better bungalow home at about 1500sq ft with about an investment of $150k to $250K to do it.
They dont plan on moving for many years but the concern is... is this not smart to do this in this area or will the investement pay off when it is time to sell in 10-20 years? He is worried he will have a house that should be worth $600K but the area can't bear it right away in case for unseen reasons it has to be sold and he could lose a lot of money.
Your thoughts please
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Well for starters, knowing what I know about the area and the square footage you indicated, I can tell you that it is likely the home is worth less than $400,000 especially if renovations need to be done.
This is ofcourse assuming that there is no legal suite downstairs.
If there is, it might be more palatable to investors and might bring the price up closer to the high 300's.
It depends on your friends short term / long term plans.
If he plans on staying in it for atleast another 5 years, then some significant renovations might be warranted. The easist most effective renovations I find are: changing flooring and kitchen cabinets, counter tops, appliances and renovating the bathrooms. I wouldnt advise tearing down a house like this and building two separate infills. This is very costly and risky. It's also a big investment.
If he has a horizon less than 5 years, I would advise making minor repairs.
You will never get back 100% of your renovation investment when it comes time to sell.
Just my two cents