Matriomonial Home Renos

[Tawanda]

Right now I am living in the matrimonial home, while my husband moved out. I am considering whether to keep the house, sell the house as is, or renovate the house and then sell it.

For one thing, I am not sure yet if I will be able to afford to keep the house. I could possibly buy it out, offsetting it with my H's RRSPs.

Right now we have a large house in a desirable location. Our basement is in the process of being renovated and we have put a lot of money into it, although it still needs a few more thousand to finish it completely. If we do the reno's it will add THOUSANDS to the value of the house.

So my question is, I would only renovate the house if I am planning on SELLING the house right? Otherwise, I will be just raising the value of the house and will have to buy him out for more money right?

Thanks!
T

[arabian]

I was told years ago, by my realtor, that you should really only renovate for your own purposes. She told me that it was her experience that many people renovate homes and then have a hard time being realistic with pricing. I listened to her advice and was able to sell that house within 3 days in a fairly tight market.

Renovations traditionally take much longer (and much more expensive) than you plan on.

Some people do this at time of separation as a means to put off making the inevitable move to a new place.

[DowntroddenDad]

I've had similar advice from a couple of realtors, but it usually comes with modifiers.

If you have a non functioning kitchen or bathroom, and you can afford to renovate it to the current standard, then you will probably get your investment back, and sell the house quicker.

But many people look to buy fixer uppers and fix them themselves, to their tastes. I know that is what my GF is interested in doing - she has particular tastes and wouldn't want a fully done up house.

I would suggest have a couple of real estate agents over and ask them. Much depends on the local market.

[Tawanda]

We have already put thousands into the basement and it is almost ready to go. The drywall is up, electrical ran, and plumbing ready. All it needs is mudding/taping, carpet and baseboards. I am sure the value of the house would increase by quite a large amount, definitely enough to get a good return. We would be able to sell it as having a fully finished basement with finished bathroom, vs. no basement.

Mostly I am just wondering, if I renovate it, and then decide not to sell it the house would be worth more and I would have to buy out a larger portion??

We own ALL of the stuff to finish the bathroom downstairs as well, it just needs to be finished. (we have purchased a sink, shower, tile, faucet, toilet, etc.).

[DowntroddenDad]

When you say we, do you mean you and your ex? Cause if you do, then I don't see the issue, both of you can pay for the reno 50/50 and then increase in value will be split 50/50.

[Tawanda]

That makes sense to me if we sell it. But if I decide not to sell it, and I have to buy out his portion, then the house is valued higher and I have to pay more? Am I making any sense, I am just confused how that would work.

[DowntroddenDad]

Yes, you would have to get the house appraised after the renos, and base it on that. But you are getting a house that is worth more. So it is fair.

[Tawanda]

I guess that makes sense, because if I were to sell it again later on down the road, it would (hopefully) sell for more. Thanks!

[DowntroddenDad]

I guess that makes sense, because if I were to sell it again later on down the road, it would (hopefully) sell for more. Thanks!

Don't forget, he only gets/pays half, so if the increase in value is $10,000, you only pay $5000 more. Adding a second bathroom is not a bad idea for a larger house.

[arabian]

Labor is usually the largest part of a bill for renovations. WE can all shop around and get deals but someone has to install and modify. That is where the real cost comes in, in my opinion. Do-it-yourself can actually lower the price. Be sure you have inspections done or your work may end up costing you. I've heard of people factoring in the cost of removing a recent renovation if it is poorly done.