IT'S a dilemma many of us face when contemplating a renovation: "Does it make financial sense to do what we want to do?" and, like most enigmas, there's rarely an apparent answer to the question.
Obvious factors like project scope, budget or market value get muddled up with less defined elements like a homeowner's love of a given neighbourhood or their attachment to a property and make the decision anything but cut-and-dried.
Regardless of your situation, however, it's a worthwhile exercise to figure out if the cost of a renovation added to the value of your existing house will hold its overall worth in your given context and market.
If your home happens to be the smallest abode in a neighbourhood that is seeing burgeoning values and sales, then the decision to renovate might be a no-brainer but usually the monetary value of a renovation is not so obvious.
In general small renovations that address specific and identifiable shortfalls to an otherwise functional home are generally the most prudent and cost effective and, because of their limited scope, typically don't carry enough momentum to initiate a phenomenon called "project creep."
Project creep is the natural tendency of a project to grow beyond the original scope of work for various unanticipated reasons brought to light by the renovation. This might be a realization after removing drywall that the plumbing or electrical system in your home is woefully inadequate or that those cold exterior walls were actually filled with nothing more than newspaper scraps from the '50s.
Regardless of the circumstance, the result of project creep means more work done and more money spent and it can create huge financial stress in a project.
Medium scale renovations are usually the most susceptible to 'project creep' with comments like: "you've come this far you might as well." coming back to haunt homeowners in the end. It's easy to keep adding things to your scope and have a medium sized project grow into something so extensive that both its affordability and value are called into question.
For homeowners embarking on a large-scale renovation it's essential to be aware that at a certain point in the tipping scale of project scope, the renovation work being done will become big enough to make the existing home more a liability than an asset. One needs to recognize when this point is crossed and, better yet, to avoid it altogether.
Many times with large renovations it's financially wiser to sell the existing house, add the renovation budget to the overall sum and purchase something new with desired features already there. But rare are decisions so easy and often the more nebulous factors of connectivity to place and locale come into play.
Solving the renovation mystery "Does it make financial sense to do what we want to do?" is never an easy one but for most people the answer lies in the balance between what they'd like to see and what makes good market sense.
Kevin Vallely is a residential designer in North Vancouver. Follow along Kevin's "small house" design at cliffhangerhouse. com.
© Copyright 2013