House renovation is a huge business. There is much to consider before undertaking a major renovation. This column will look at some of the issues that should be considered prior to renovating.

The first thing you need to do is to consider whether or not it makes financial sense to renovate. If you are renovating out of sheer necessity, this analysis may not be relevant. For instance, if your family has outgrown its current house, you may not have any choice but to add an addition, finish your basement or add a bathroom. However, many people view renovations as a way to increase the value of their homes. If you fall into this class, it is important to consider if the proposed renovation will actually add value to your home in the long run. In other words, will you be able to recoup the cost of the renovation by earning a higher selling price when you ultimately sell your house?

The reasons for renovating vary as the renovations themselves. Renovating is an excellent alternative to moving. If you like your house and the surrounding neighbourhood, but lack adequate space in the house, renovating may be preferable over moving. People who own rental properties renovate to keep or attract tenants. Renovating is sometimes a necessity, especially with older homes. Whatever the reason, a renovated house should increase both the utility and value of your house. In addition, a renovation can add years of enjoyment to your house. This is something that cannot be measured by money alone.

Many studies have been done analyzing the impact that certain renovations will have on the resale value of homes. You should not expect that a renovation will generate a return greater than the cost. However, that does not mean that the work is not worth doing. There is nothing wrong with doing a renovation that you will enjoy. You must realize, however, that not all renovations will pay off financially.

Some renovations make obvious sense. For instance, if you live in three-bedroom house and most of the homes in your neighbourhood contain four bedrooms, it may be difficult to sell your house. If you do list it for sale, the only way that it may sell is if you reduce the price to reflect the fact that it may not be as desirable as other houses in the neighbourhood. In cases like these, renovating to add another bedroom may make sense. Adding a bathroom to a house that has only one will also make sense in both the short and long term. Even if a proposed renovation does not give you a full return on your investment, it will likely facilitate a faster sale. Being able to sell your house when others in the same neighbourhood cannot is a good reason for conducting the right renovations.

If you are going to renovate, it is wise to prepare plans and present them to a knowledgeable realtor. An experienced realtor will be able to tell you the value of your home with and without the proposed renovations. This will tell you whether or not the renovations will be worthwhile in the long run.

Deciding to renovate requires careful consideration. Whether you are renovating out of necessity or out of a desire to increase the value of your house or for both reasons, renovations should be taken seriously.