Should You Renovate If You Are Planning a Move?

We found another great article authored by Scott McGillivray of HGTV entitled “Top 5 Renos for Return on Investment” and thought we would share it with our readers as folks are always asking us if it pays to update their home if they are planning a move.  According to Scott “…knowing the right renos to invest in is important to ensure you get the most bang for your reno buck”.  Here is a brief overview of the renovations he suggests may give the most return on investment:

5. Flooring:  Installing new flooring gives a room an updated and renovated look and feel and can be done on a fairly limited budget, depending on the flooring you choose.

4. Hardware & Fixtures:  A home can be updated relatively inexpensively simply by replacing items such as cupboard and drawer handles in a kitchen and/or bathroom, changing outdated light fixtures, and replacing door knobs and/or door hinges.

3. Bathrooms:  Updating a bathroom to give a “spa-like” feel gives a great return on investment as they are usually the smallest rooms in the home and therefore require less investment to make a big impact. When it comes to bathroom renovations Scott states “a little goes a long way”.

2. Kitchens:  Scott assures “…you can do a great kitchen renovation on a realistic budget” and further states “…kitchens also give you the biggest return on investment, far beyond any other room in the house”.

1. Income Suites:  Scott reports “…there’s no renovation you can do to your home that will increase its value as adding an income suite”, he further states “income suite renovations, when done correctly, easily allow you to double your investment”.

We hope these few tips help make your decision about renovating your home easier – to read Scott McGillivray’s full article online please click here.

If you or someone you care about is thinking of making a move or if you just want some general information about the Real Estate market in your area, please don’t hesitate to give us a call, we would love to talk to you!

Until next time,

The Jamie Dann Team

Rising Interest Rates

We have been hearing a lot of talk recently about interest rates in Canada being on the rise, so thought we would take a look for an interesting article regarding this subject. We found a great article from the online Financial Post written by Garry Marr entitled “Can You Handle Higher Interest Rates?”

In his article, Mr. Marr states “higher mortgage rates are on the horizon”. He quoted Frances Hinojosa, a mortgage expert with the Bank of Montreal who stated “First-time buyers should stress-test their mortgage to ensure they are well financially prepared for home ownership and a potential upswing in interest rates, not only to manage costs but also to pay off their mortgage as soon as possible” – he explains that stress testing a mortgage would include considering higher interest rates and a shorter amortization period.

Mr. Marr reported that the Governor of The Bank of Canada indicated that the long term goal is a “gradual normalization” of rates.

We thought it was quite interesting that in his article, Mr. Marr gave an example of a $500,000 mortgage with a 25-year amortization saying “at 3% your monthly payment would be $2,366.23 and you would pay $69,346.66 in interest over a five-year term. Take that same mortgage and raise the rate to 3.5% and the monthly payment jumps to $2,496.36 and the interest over the term reaches $81,180.96”.  We found it remarkable that an increase payment of $130.13 monthly could add up to an overall payment of $11,834.30 over a five year term!  That is an example of an interest rate rising only ½ %! Amazing!! He then gives information regarding the payment if that same mortgage’s interest rate jumped to 5% (only 2% more) – the difference in the monthly payment would be $541.80 and the difference in the amount paid in the total interest cost over the five year term soars to $47,672.33!!

To read the full article, click here.

If you or someone you care about is thinking of making a move or if you just want some general information about the Real Estate market in your area, please don’t hesitate to give us a call, we would love to talk to you!

Until next time,

The Jamie Dann Team