*Properties mentioned in this article are comparables. They have a similar renovation cost, are located at a similar neighborhood and are similar in size in terms of square feet. The only major difference is their designs.
Renovation A:
Located at a middle class neighborhood at Bloor and Ossington, this property was purchased by a builder in October 2018. After 6 months of complete renovation, the property went through electricity, sewage, insulation upgrades and structural reinforcement. The whole renovation would cost around $240k to $260k, including permits fees and appliances. The property was listed in June 2019, and was sold in February 2022 at 2.07 million, which is a market high.
Total profit: #$2,075,000 - $1,889,749 = $185,251
A profit of $180k may not even match an one-year increase of the price of detached homes in the GTA.
While a property should be sold within 1-2 weeks the first time on the market, this house's unfavorable layout and finishes selections has caused it to be undesirable to a point where the price has to be lowered repeatedly just to be sold. A reno that doesn't make sense will not only significantly reduce liquidity, the house was also sold for 15-20% less than similar refurbished homes over the same period.
The followings are two examples of properties that were sold at a better price just because their designs and decorations are superior to Renovation A.
Renovation B:
With a similar size, location and layout, this property was sold 3 months earlier than Reno A. Its exterior is mediocre, paired with an interior that has no obvious highlights. The only advantage is that the design is consistent throughout the house. The house was sold for $400k more than Reno A.
Renovation C:
Located at a slightly worse neighborhood that Reno B, but it has the best looking exterior out of the three properties. The appearance of the traditional house was restored classically without excessive changes by the builder. The interior is relatively neutral. The combination of white and wood is not a brilliant design, but it is pleasant to most buyers. The only shortcoming is that the layout of the third floor is not ideal. Even so, it was sold for 2.37 million three months earlier than Reno A.
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