Home Renovations You Say??!

Is it already Fall?? Where has 2022 gone? As I get older, I realize that time is very much of the essence and every day is a day I need to make count as much as possible. Upon reflecting, the days and years seem to fly by and working in the same role as a Mortgage Agent for almost 10 years now, it is sometimes hard to keep track of timing for goals, targets and direction. I remember many years ago while working at TD, I had a vision of becoming a homeowner and wanted to customize my own kitchen and washroom just like I had seen on those HGTV shows and Extreme Makeover. "MOVE THAT BUS!". Ok, I'm dating myself with that reference.

In 2011, I bought my first home for $212,000. Yes, in Ottawa. It was a 3 bedroom townhome in the east end of Ottawa in an area called Blackburn Hamlet. The house had been featured on a show called "All for Nothing" which was hosted by Paul Rushforth, a prominent Ottawa Realtor. The premise of the show was for two home owners to do all of their home renovations for no cost. The contestants did this by having garage sales, raising money from friends and family and essentially using none of their own funds to renovate. In the end, the winner would be the one who had the highest % increase in value after the renovations were complete. The winner would receive a commission free listing of their property. The previous owners of this home won the episode and this allowed me to get a discounted price on my purchase as they were not having to pay a commission for their sale. It also allowed me to acquire a property with lipstick on a pig and visually decent renovations, but quality wise...getting what I paid for. Prior to selling the property 7 years later in 2018, I decided to renovate the kitchen and both washrooms again. The total renovation cost me $8000 at the time (thanks IKEA!) and I ended up selling for $217,000. 7 YEARS LATER!! Can you imagine a home buyer today selling for $5000 more than they bought for over 7 years? It's unfathomable. This was considered a decent sale at the time and the record sales price for the street. This same home now easily sells for over $400K just 4 years later.

Once I sold that first home, I found a beautiful home in a small village in Ottawa called Britannia Village. It's a little quaint neighbourhood just east of Britannia Beach (check out the Britannia Coffeehouse if you love coffee). In mid 2018, a friend and I bought one side each of a semi detached building for $340,000/side and this time I decided to go all out on my renovation dreams. I utilized an amazing program offered through CMHC and other insurers called the "Purchase Plus Improvements" plan. It has since been changed to be called the Improvement Plan which just doesn't have the same ring to it. This plan allows you to have the cost of your renovations wrapped into your new mortgage. Does this sound too good to be true? It isn't. In some cases, lenders will allow you to incorporate up to $100K in renovations to your mortgage so long as the upgrades being done increase the value of your home by equal to or more than the total cost of the renovations. For example, if you update the kitchen, floors and washrooms, it may cost you $40,000 but it will increase the value of the home by $80,000. This would qualify. When I bought this home, it was a bit of a hoarders paradise. RIP Coolio. There was carpet everywhere, doors blocking off clear sight lines, laundry in the middle of a hallway....very strange set up. I will say, you need to have some creativity involved with these types of projects as you often have to look past the view and look to the vision. I ended up spending about $65,000 on renovations and at the time was able to wrap in $40,000 to my mortgage which was the CAP in 2018. After the renovations and some exterior landscaping, including a 600 sq foot deck that I built with my own hands (with the help of some amazing friends), I was able to sell the property in January 2021 for $625,000 (closing in April 2021). This was due to a few factors including the pandemic and the real estate market being at its peak due to limited supply of homes and many people migrating and immigrating to Ottawa/Canada. It was also due, however, to forcing the appreciation of the home through these updates.

I had every intention of staying in this home for many years to come, but I ended up finding the house of my dreams a bit further west in a small community called Crystal Bay in Ottawa. I saw an old, original brick bungalow that stole my heart. I thought to myself "hmm, if I could do that with my current home, perhaps I could go even further and completely remodel and renovate this new home". What could go wrong right? WRONG. This turned out to be a complete love/hate project as I struggled with the original HVAC being underground, crushed over time and needing to redo the whole HVAC system through the attic, relocating the washroom which created plumbing chaos and involved someone hand chipping away at the concrete slab for a week to build the trenches for the pipes, mold in the attic, delays on supplies due to lockdowns, limits on people in the home due to the pandemic...everything that could have gone sideways, did (see photo at top of article). What I thought would take 60 days took 5 months but in the end turned into my absolute dream home. This all stemmed from the simple under-utilized program offered by the amazing insurers in Canada CMHC, Sagen and Canada Guaranty (all links lead to various programs directly). This is possible for you and your loved ones as well.

I have successfully advised 18 clients on this program over the years and all of them have reached out multiple times to thank me for the advice and introduction to this program. With Ottawa being an older city, there are lots of homes that can benefit from a custom renovation and update from their original form. Not only does it force appreciation to the value of the home but it also allows you to customize your new home to your liking. Live out your HGTV dreams in the same way I did. Having a home customized to your liking will make you not only appreciate the time spent in it more, but will also put more money back in your pocket when you eventually sell the home down the road. Win/Win.

If you are actively shopping or have dreams and aspirations of creating a custom space for you and your family, I am always open to discuss my experience and help to better explain the ins and outs of this program. If you haven't already, please check out my website www.paulstevenson.ca and utilize the calculators to see how much you would qualify for on your next home.

Wishing you all a very Happy Thanksgiving with loved ones! I am very excited for Turkey and spending time with my kids, my parents, my brother and sister and all of my nieces and nephews.

-Paul S